| leolingham2000 Full member - Member Since: Apr 2005 Subject - Re: Seniors ... please help me understand the concepts of : Moushmi Pan HERE IS SOME USEFUL MATERIAL Distribution or marketing channels are the flow paths companies use to reach customers with products and services. More specifically, channels refer to the different organizations that participate in making products and services available to end users. Selecting appropriate channels involves choosing ones that efficiently meet the manufacturer's needs and effectively serve end users and increase their satisfaction. In addition to helping manufacturers serve customers, channels allow manufacturers to transfer a portion of their marketing costs to channel partners, such as distributors or dealers. Marketing costs typically amount to 35 percent to 40 percent of a product's selling price. The marketing costs transferred to channel partners usually include the costs of inventory, sales and promotions, order handling, and credit functions. The channel's discount, or margin, compensates the channel for the functions it performs. Successful channels perform these functions more efficiently than the manufacturer, which allows the channel to make its profit. Manufacturers retain a portion of marketing costs to perform distribution-related functions including: Deploying a field sales force to handle direct accounts or manage channel marketing programs. Developing marketing programs to support the channel's sales activities. Carrying a minimal amount of finished goods inventory. Two categories of channels exist: direct and indirect. Direct channels are controlled by a manufacturer and support the manufacturer exclusively; indirect channels carry multiple product brands and lines and serve more than one manufacturer. Examples of direct channels are a company's own field sales force; an electronic channel that is used to sell directly to end users, such as the Internet; or a company catalog. Indirect channels include distributors, dealers, sales agents or representatives, sales contractors, stockists wholesalers, telesales organizations etc Direct channels provide manufacturers with the greatest control over the channel but are more costly than indirect channels. Indirect channels help manufacturers maximize market coverage and are more cost-effective because they assume many of the costs of doing business from the manufacturer, such as costs associated with sales, service, inventory management, and order-fulfillment functions. Indirect channels also offer important services to end users--including technical support, buying convenience, delivery, and credit--that may not be available from a manufacturer. The system of intermediaries between the producers, suppliers, consumers, etcetera, for the movement of a good or service. The distributor/dealer sales channel. Vendors that sell in the channel rely on the sales ability of their dealers and the customer relationships they have built up over the years. Such vendors may also compete with the channel by selling direct to the customer via catalogs and the Web. ================================================== ==================== DIRECT CHANNEL COS>>>> DIRECT TO CUSTOMERS -the company sells directly to customers using the sales team. Indirect channels include distributors, COS>>>DISTRIBUTORS>>>CUSTOMERS -cos use the distributors to sell to the customer like industrial products/consumables/IT products etc ALSO COS>>>DISTRIBUTORS>>>RETAILERS>>>CUSTOMERS like food products etc --------------------------------------------------------------------------------- dealers, COS>>> DEALERS >>>CUSTOMERS -cos sells to dealers , who in turn sell/service customers like motor vehicles ----------------------------------------------------------------- sales agents COS>>> SALES AGENTS >>>CUSTOMERS cos use sales agents to market/sell products for commission like tractors etc ------------------------------------------------------------------------ COMMISSION representatives, COS>>> COMMISSION AGENTS >>>CUSTOMERS cos use commission agents to market/sell products for commission like real estate, industrial plots etc -------------------------------------------------------------------------- sales contractors, COS>>> SALES CONTRACTORS >>>CUSTOMERS cos use sales contractors to market/sell products for commission like industrial consumables/ training packages etc ---------------------------------------------------------------------------------- stockists COS>>> STOCKISTS >>>RETAILERS >>>>CUSTOMERS cos use sales stockists stock /sell products for commission like groceries etc ---------------------------------------------------------------------- wholesalers, COS>>> WHOLESALERS >>>RETAILERS >>>>CUSTOMERS cos use wholesalers who stock /sell products for commission like groceries /stationeries etc ------------------------------------------------------------------------------- telesales organizations COS>>>RETAILERS>>> CUSTOMERS -cos uses telesales to push sales thru retailers to customers ALSO COS >>>CUSTOMERS -cos also sell directly to customers ----------------------------------------------------------------- ONLINE MARKETING COS >>>CUSTOMERS -cos sell directly to customers ---------------------------------------------------------------------- CHAIN STORES COS>>> CHAINSTORES >>>RETAIL OUTLETS >>>>CUSTOMERS cos use CHAINSTORES who stock /sell products for commission like groceries /stationeries etc[ WAL MART/ BIG BAZAAR[INDIA] ================================================= VENDING MACHINES COS>>>FRANCHISE HOLDER OF VENDING MACHINES>>>CUSTOMERS cos supply vending machines/products to franchisee who manage it like snack food chips/ drinks like cola etc. ================================================== ==== ================================================== ====================== institutional sales, -a system of selling products / services to institutions, where the company reps call on the buyers in the institutions, like HOSPITALS, EDUCATION DEPARTMENTS, COLLEGES, SCHOOL, RESEARCH CENTRES, MEDICAL CENTRES ETC COMPANY >>> INSTITUTIONS>>> CONSUMERS ----------------------------------------------------------------------- retail sales, -a system of selling products /services to actual consumers/customers across the counter, like supermarkets , department stores, franchise stores, small independent stores, etc etc RETAILER >>> DIRECT TO CUSTOMERS -------------------------------------------------------------------------------------------- non - retail sales, --a system of selling products /services to actual consumers/customers. These could include like *company reps selling chemicals to other cos. *commission agents selling door to door, like soap powder etc *cos reps selling tractors to farmers etc etc COMPANY>>>DIRECTLY TO CUSTOMERS --------------------------------------------------------------------------------- whole sales Here the company sells the products/services in large/bulk quantities to a wholesaler, who in turn sell the product to -smaller sub wholesaler -others retailers -sometimes to large direct customers like factories etc. COMPANY>>>WHOLESALER>>>RETAILERS>>>CUSTOMERS ============================================ regards LEO LINGHAM kishore2009 - Member Since: Aug 2006 Subject - Re: Seniors ... please help me understand the concepts of : You can get detailed views on each topic in book MARKETING MANAGEMENT by PHLIP KOTLER.
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