iii. A product that is perishable in nature would need a shorter channel. 3. To meet the ever-changing conditions in the marketplace, the channel arrangements would require modifications over a period of time. An example of this type of system could include a large retailer such as Wal-Mart dictating conditions to smaller product makers, such as producers of a generic type of laundry detergent. Distribution Channels and Logistics Management Entrepreneurs do not normally realize the importance of marketing until they, Chapter 6 A ‘push’ strategy uses the manufacturer’s sales force, trade promotional money, or other means to induce intermediaries to carry, promote, and sell the product to end-users. Goods that have a high unit price and a high margin are delivered directly by the manufac­turers. Marketing Channel Design 8. (c) Intensive distribution – This consists of the manufacturer placing the goods or services in as many outlets as possible while the distributors are also handling many competitors’ products and brands. However, the choice of location for retail outlets, point of purchase displays and advertisements can make the cues stronger. Manufacturer – Wholesaler — Consumer – 1 Level. On the other hand, if he does not get the desired result on the first trial itself, he will look for alterna­tive cues and try some other brand of drink or some other method of quenching thirst. This is ideal for consumer non-durables. Order lot size – If the average order lot size is smaller, transportation costs increase. Stern & El-Ansary define marketing channels as – “sets of independent organisations involved in the process of making a product or service available for use or consumption.”. Corporate VMS looks at having the successive stages of manufacturing and distribution under a single ownership. Example- teleshopping network, Proactive acne kit, etc. a) Manufacturers – Retailers – Customers: This option consists of only one intermediary. Many organizations, from the smallest SMEs to the largest sized firms have implemented or are in the process of implementing online marketing strategies. If satisfied, the consumer starts behaving like the proverbial Povlov’s dog and reaches the stage of automatic response behavior. Economic Criteria – Each alternative channel design will result in different levels of sales and cost as shown in Figure 10.3. A Vertical Marketing System (VMS) comprises of the manufacturer, wholesaler and retailer, all acting as a unified system as against the conventional marketing channel system in which each of the channel members are a separate entity. It has to periodically evaluate the performance of individual channel members against their own past sales and other channel members’ sales. Contractual VMS involves independent organisations at different stages of manufacturing and distribution and integrates their efforts on a contractual basis to obtain more economies of scale than would be possible for them to do individually. h. Payment – The channel members also assume responsibility for the buyers honouring their payments to the sellers through banks and other financial instruments. Consumer goods channels take many forms. Mostly direct channel, i.e. However, some service providers may take help of agents who can provide the information to the customers, book the orders, and collect the payment on behalf of the service providers. He will try that brand of soft drink, and, if he is satisfied, he will use the same brand of soft drink every time he gets thirsty. This is a set of interdependent organizations or parties involved in the process of making a product or service available for consumption or use by consumer or end-users. Introduction According to psychological theory, a consumer goes through a chain of stages while making a pur­chase. For example, Grahak Peth, Apana Bazar, etc. Each channel system has a different potential for creating sales and producing costs. Marketing channels illustrate the organizations that work together tog get your product and service to the end-user. Companies’ with multiple product portfolio and producing consumer non-durables with national and international market resort to this channel. An example of this type of conflict is one auto dealer having a conflict with another auto dealer. e. More than three levels – In some cases, one can observe longer marketing channels, that is, channels that have more than three intermediaries. Here the indirect channel is more economical. Marketing channels must not just see markets but they must also make markets as one of the chief roles of marketing channels is to convert potential buyers into profitable customers. A marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users. A channel’s horizontal dimension (width) is determined by the number of participants of any one type on the same level in the channel. Marketing channels are the ways that goods and services are made available for use by the consumers. This coming together may be on a temporary or permanent basis. This strategy of distribution, coupled with the packaging (similar to the twist-wrapped style for hard-boiled sweets) contributed to the success of Halls. 3.1 (b) three producers contacting three consumers through one distributor. At it's most boiled down form, it is simply a term for the ways in which a company could reach their prospective buyers. Direct channels of distribution can take the following forms: a. Generally shorter channels are observed. The purpose of this study is to investigate the various trends in the implementation of online, company conducted its market segmentation, targeting and positioning strategies in the industry and marketing mix strategy. The producer/manufacturer and the final consumer form a part of the channel and are at both ends of the channel. When deciding the length of the channel there are several factors that need to be taken into consideration. The Japanese have the ‘just in time’ inventory system by which they have cut down tremendously on inventory holding. Given the lower return on investments in the retail business, organisations would be better off investing their money in their main business rather than taking up retailing or other channel functions. Marketing channels can make the services “available” and “accessible” to the target customers. Roses from Kash­mir fly to London every day, and milk from Haryana comes to Delhi in refrigerated vans every day. An example of this type of conflict is if an organisation appoints two agents for the same territory. Channel length can vary from zero to n in case of consumer goods. b) Manufacturers – Wholesalers – Retailers – Consumers: Here, two intermediaries exist. Modifications become necessary when the channel is not working as planned or anticipated, when newer channels emerge, or even when the product passes through progressive stages in its life cycle. A zero level channel – As the name suggests, in this type of a channel, there are no intermediaries or zero level of intermediaries. The cue gives him the idea that the soft drink (goal) will quench his thirst. But, in such cases, problems such as the distribution staff forming unions, increase in the cost of maintaining infrastructure, and wage rise, might hamper the organization. Here, channel components are owned and operated by the same organisation. Factors Influencing Design and Selection 9. The functions of the distribution channels are: a. Given this, there is also a greater possibility of channel competition and conflict. Also, what is promised by the cue must be present in the product, or else it will lead to dissatisfaction in the consumer. A small organization may not be able to afford di­rect distribution, and it may be better to give that job to some other big company or sole-selling agent. Conflict. Channel of Distribution plays a very important role in achieving the marketing objectives of a company. On the other hand, frequently used and ‘low margin’ items like cigarettes have a long chain of middlemen before they reach the ultimate consumers.

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