Queries
hi team,
How are you all ? Hope fine. Achha team, can you tell me what is
channel sales,
institutional sales,
retail sales,
non - retail sales,
whole sales,
Their significance and point of difference.

Please
Regards,
Moushmi Pan

21st August 2006 From India , Mumbai

PARTICIPATING IN DISCUSSION:
Leolingham2000
Management Consultant
Moushmi
Service

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
22nd August 2006 From India , Mumbai
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