MKT 750 Individual Presentation

Marketing Channel

Ahmad Aman Bin Mohd Saifuddin (2013985225)

Presentation Overview
1) What is Marketing Channel
2) How Marketing Channel Influence
i. Organization segmentation
ii. Communication
iii. Pricing
iv. Offering strategy

3) Conclusions

TITLE SEPARATOR

WHAT IS MARKETING
CHANNEL ?

Marketing Channel.
1.
2.
3.
4.
5.
6.
7.
8.
9.

Definition
Objective
Marketing Channel Flows
The importance of Marketing Channel
The Functions of Marketing Channel
The Types of Marketing Channel
The Marketing Channel Strategies
Designing Marketing Channels
Bases Of Power In the Marketing Channel

1.0 Marketing Channel

A Marketing Channel is a set of interdependent

organizations involved in the process of making a product or
service available for use or consumption.
OR
Marketing Channel is a set of interdependent organizations
that ease the transfer of ownership as products moves from
producer to business user or consumer.
Also known as Distribution Channels

Objectives Of The Marketing Channels

To ensure the availability of the product at the point of
sale
To build the channel member loyalty.
To stimulate channel members to put greater selling
efforts.
To developed managerial efficiency in the channel
organization.
To identify your organization at buyer level.
To have an effective and efficient distribution system ,
to make your product and services available.

The Importance Of The Marketing Channels

Time and place utility
Convenience to customer
Information to the producer

Stability in prices.
Promotional Activities.
Storage of finished goods(additional).
Finance the producer.

Marketing channel strategy growing in

importance. WHY???

Search for sustainable competitive advantage.

Growing power of retailers in marketing
channel.
Need to decrease the cost of distribution.
Increased role and power of Technology.
New stress on growth.

Functions Of Marketing Channels

Information
Provider

Price
Stability

Promotion

Financing

Title
exchanges

Matching
Demand
And Supply

Matching
Buyer and
Seller

Types of Marketing Channels

Direct
Channels

Indirect
Channels

Method of selling directly to

end user from the
manufacturer with no
intermediaries

Involves a products passing

through intermediaries in
order to be made available for
purchase by a customer

Companies Using Direct Marketing

Channels

Companies Using Indirect

Marketing Channels

Consumer And Business

Channel

Five Marketing Flows In the Marketing Channel

Example : Forklift Trucks

CHANNEL STRATEGIES

Intensive
Distributions

Selective
Distributions

Exclusive
Distributions

CHANNEL STRATEGIES Intensive Distributions

Where manufacturers distributes his
products through as many distributors as
possible.
It is used for the products that is
characterized as low involvement of the
customer and where customer looks for
convenience location.
Products like chocolates, soap, shaving
blades and detergents are distributed this
way.

CHANNEL STRATEGIES Selective Distributions

Where manufacturers distributes his products
through selected outlets.
It is appropriate for consumer shopping goods such
as various type of clothing and appliances and
business accessories equipments.
Usually the manufacturer move to selective
distributions to
hinges from high cost of intensive distribution
unsatisfactory performance of middlemen
Enhance image of the products
Strengthen customer services
Improve quality control
Maintain influence on prices

CHANNEL STRATEGIES Exclusive Distributions

Where manufacturers distributes his products
through relative fewer number of major outlets who
exclusively deal with it and not all competing brand.

This is common for product who seeks high

prestigious image.
It is commonly used for designer ware, major
domestic appliances, and even automobiles.
By granting exclusive rights the manufacturer hopes
to have control over the intermediaries price,
promotion, credit inventories and services policy.

CHANNEL STRATEGIES Summary

Designing a Channels Systems

Formulating Channel Objectives
Identifying channel functions
Linking design to product characteristics

Evaluation of distributions environment

Evaluation of competitors channel design
Matching channel design to company resources
Evaluating alternatives and selecting the best

Bases of Power in Marketing Channels

Reward Power
Coercive Power

Legitimate Power
Referent Power
Expert Power
Effective Channel Management Depends On How Well

These Power Bases Are Combined and Used

HOW
MARKETING
CHANNEL
INFLUENCES

HOW MARKETING CHANNEL INFLUENCES - Segmentation

Channel Segmentation is about defining and

segmenting a retail channel, with implications for
Point of Purchase strategy and activation.
Understanding and segmenting your channels can
minimise wastage, increase your product sales via
relevance, deepen your relationship with retailers and
set realistic expectations for product launches and
sales performance given your understanding of the
channel and its role

HOW MARKETING CHANNEL INFLUENCES - Segmentation

Channel Segmentation influences organizations

applications on the following:1. Distributions and ranging strategy
2. Space and layout strategy
3. Visibility, merchandising display
4. Pricing and price promotion
5. Retailer, staff education & incentives
6. Measurement &evaluations tools for channel
segments.

HOW MARKETING CHANNEL INFLUENCES - Communication

Communication can be described as glue

that holds together a channel of
distributions.
It helps organizations to developed and
disseminates communications to stimulate
purchasing.

Push & Pull Strategy

push strategy
directs communication efforts at channel
members
many products, such as business products, are
promoted with a push strategy, involving
personal selling and use of trade promotions
pull strategy
directs promotion at the end consumer
most consumer products would rely more
heavily on a pull strategy
where promotion is directed at the consumer to
stimulate demand

PUSH STRATEGY
Producer

Wholesaler

Retailer

Consumer

Retailer

Consumer

PULL STRATEGY
Producer

Wholesaler

Product flow

Communication effort

HOW MARKETING CHANNEL INFLUENCES - Communication

In order to have an effective

communication in channel members the
organizations have to manages/clarify
Objectives between manufacturer and
retailer
The differences in languages
Participation in decision making process
that involve directly to their businesses.
Adequacy of information

HOW MARKETING CHANNEL INFLUENCES - Pricing

Channel members conduct price

negotiations with buyers and assists in
arriving at the right price (the price that is
acceptable for user and manufacturer.
Pricing in Channel Management involves
Cost
Market
Competition
Channels

HOW MARKETING CHANNEL INFLUENCES - Offering

The marketing channel help in identifying the best strategy to
distribute his product which reflect the nature of product as
explain in table below :NO

TYPES OF
PRODUCT

1.

Convenience

2.

3.

NATURE OF
PRODUCT

CHANNEL
STRATEGY

EXAMPLE OF
PRODUCTS

Willing to invest in
very limited
shopping efforts

Intensive
Distribution

Food,cleaning
products&personal
care

Shopping

Consumer is
willing in a great
deal of time and
effort

Selective
Distribution

Clothing & Personal

services

Specialty

Goods are those

that are of interest
only to a narrow
segments of the
population

Exclusive
Distribution

High end luxury

automobiles

Other Offering Strategy

Product
Comparison
advertising

Product
Benefits
advertising

Product
Family
advertising

Corporate
advertising

References
Cullen, Kathleen and Caryl Helsel, Defining Revenue
Management, Top Line to Bottom Line, HSMAI Foundation,
Bethesda, MD, 2006
Sagar Gadekar, MIT Pune's Maharashtra Academy of
Engineering, Alandi, Pune MD, 2012.
Faculty leebow.drexel.edu/RoselbloomB/Channel
Shodhganga.inflibnet.ac.in/bitstream
www.knowthis.com/product-decisions

Conclusions
Distributions is the most important variable in
marketing plans of most consumer and
business goods manufactures, because
managing such a massive sales and
distribution network is in itself a huge task
Understanding the nature of Marketing
Channel can help avoids/manages the conflict
therein and perhaps ensure the effectiveness
of product availability in the market

Other Offering Strategy

In a market where your offering is one of several providing

similar capabilities, if your offering stacks up well when
comparing features then a product comparison ad can be
beneficial.
Product Benefits advertising
When you want to promote your offering without comparison to
competitors, the product benefits ad is the correct approach.
This is especially beneficial when you have introduced a new
approach to solving a user need and comparison to the old
approaches is inappropriate.
Product Family advertising
If your offering is part of a group or family of offerings that can
be of benefit to the customer as a set, then the product family
ad can be of benefit.
Corporate advertising
When you have a variety of offerings and your audience is fairly
broad, it is often beneficial to promote your enterprise identity
rather than a specific offering.