Distribution Channels - 2

1. Distribution Channels - 2 MKT 405: Distribution Management M Wahidul Islam Summer 2014

3. Distribution Channel Members

4. Channel Formats • Who plays the major / dominant role in the distribution channel is also a big deciding factor

5. How to decide which distribution channels to use? • Product type • Industrial / Textile / Chemicals and Fertilizers Automotive • FMCG • Pharmaceutical • Telecommunication • IT hardware • Services • Consultancy • Requirement of after-sales service?? • Who is driving the channel? • Ability to influence consumer’s buying decision

6. Producer • Direct Marketing Team • CSAs / GSAs • Central Distributor • Authorized Reseller • Own Branded Store • Regional / Market Specific Distributor • Wholesalers • Retailers • Customers

7. Producer Industrial Products • General natures • Technical • Mostly B2B • Need of more personal interaction with the customer • Relationship management very important • Examples: Production Raw Materials, Steel Mills • Agent • Industrial Distributor Critical Question: How do you manage the relationship with the Customer? • Customers

8. Producer Pharmaceutical Products • Highly technical • Doctors one of the key stakeholders • End Users / Customers virtually have no communication with the manufacturer • Examples: Medicine Companies • Distributor • Retailer / Chemist • Doctors • Wholesaler Critical Question: Can the producer influence Customers buying decision? • Customers

9. Producer Consumer Products • Target is to reach as many customers as possible • Every possible route is selected • Most evolved distribution flow / channels format • Examples: Lux, Clear, Low Cost Ball Pen, Mineral Water etc. • FMCG Products • Distributor • Different forms of Retail • Wholesaler Critical Question: Which distribution flow is right for my product? Is my Consumer buying my product? • Customers / Consumers

10. Producer Consumer Durables • Similar to Consumer Products • But needs to be maintained / serviced • Targeted Customer / End Users based • Usually high-end • Examples: Samsung, NOKIA, Sony, Mercedes Benz, QUBEE • Market Specific Distributor • Different forms of Retail • Product Service Team Critical Question: Which is more important? Distribution Flow or Service? After Sales Service?? • Customers / • End Users

11. Service Provider Services • Customer Experience is the most important factor, leading to high coordination of Sales and After Sales Customer Service • The customer interaction is directly with Company Representative, usually • Usually customer goes through a process of service experience • Purchase > Experience > Post Evaluation • Franchises / Agents are carefully chosen, and are closely controlled • Examples: DHL, Hospitals, Airlines’ • Telecommunication?? GP?? • Different Forms of Service Outlets Critical Question: Does a distribution flow exist as there is no physical movement of services? • Customers

12. New Form of Distribution Flows • Mixture of Service and Physical Distribution • Online Marketing • Tele-shopping • Catalogue Marketing (New or Old) • Kiosks • Others????

13. Online marketing

14. Tele-Shopping

15. Catalogue marketing

16. Catalogue marketing

17. Kiosk / Vending Machine

18. Kiosk / Vending Machine The Google Vending Machine The Facebook Vending Machine

19. References • Chapter 8 – Distribution Management and the Marketing Mix • Havaldar K. and Cavale V. M. (2011) Sales and Distribution Management – Text and Cases (2nd Edition) Delhi: Tata McGraw-Hill Education Private Limited • Chapter 9 – Marketing Channels • Havaldar K. and Cavale V. M. (2011) Sales and Distribution Management – Text and Cases (2nd Edition) Delhi: Tata McGraw-Hill Education Private Limited

20. End