MODULE 04

MANAGING DISTRIBUTION CHANNELS

Distribution management
• Distribution management is part of the supply chain process that
ultimately delivers goods to end-users or consumers.
• Managing distribution is essentially managing the movement of
goods, whether it be from a wholesaler to a retailer or from a retailer
to a consumer.
• Distribution management focuses on the timely delivery of goods and
prevention of loss through distribution channels.
• It includes the planning and creation of processes for managing
supplies of goods and transport
Components of a Distribution
Channel
• • Producer: Producers combine labor and capital to create goods
and services for consumers.
• • Agent: Agents commonly act on behalf of the producer to accept
payments and transfer the title of the goods and services as it moves
through distribution.
• • Wholesaler: A person or company that sells large quantities of
goods, often at low prices, to retailers.
• • Retailer: A person or business that sells goods to the public in small
quantities for immediate use or consumption.
• • End Consumer: A person who buys a product or service.
What are Marketing Channels?

• A product enters the market through various marketing

channels.
• The process of transporting a product from the
manufacturer to the retailer is known as distribution
channels.
• Moreover, the marketing channel is typically referred to
as the distribution method of products, through which a
company can efficiently transfer its goods from one
party to another through multiple mediums
 Role & Importance of distribution
channels
• Facilitating Exchange: Channels of distribution serve as intermediaries that bridge the
gap between producers and consumers.
• Product Assortment: Channels provide a variety of products for consumers by gathering
goods from different manufacturers in one place. This allows consumers to access a wide
range of products in one location, making it convenient for them.
• Logistics and Transportation: Distribution channels manage the physical movement of
goods from the point of production to the point of consumption.
• Market Information and Feedback: Channels of distribution provide valuable market
information to manufacturers. They gather feedback from customers, share insights about
consumer preferences, market trends, and competitors' activities, enabling manufacturers
to make informed decisions about product development, pricing, and marketing
strategies.
• Risk-taking:. They often take ownership of the goods they sell, thereby
bearing the risk of damage, theft, or obsolescence until the product reaches
the final consumer.
• Financing and Credit: Channels may offer credit facilities or financing
options to customers, making it easier for them to purchase products. They
may also extend credit to retailers or other intermediaries, allowing them to
manage cash flow effectively
• Marketing and Promotion: Distribution channels play a role in promoting
products through advertising, sales promotions, and other marketing efforts.
They often have direct contact with consumers and can influence purchasing
decisions through their marketing activities.
• Customer Service and Support: Channels provide after-sales services,
handling customer inquiries, offering warranties, providing technical
support, and ensuring customer satisfaction.
 Distribution Channel levels
1. Zero-level channel or direct marketing
• In this there are no intermediaries involved between the producer and the end consumer. The
producer directly sells products to customers through methods such as company-owned
online stores, direct sales representatives, or physical outlets.
2. One-level channel or retail
• In this channel there is one intermediary between the producer and the consumer. Typically,
this intermediary is a retailer who purchases products from the producer and sells them
directly to customers.
3. Two-level channel or wholesale and retail
• In the two-level channel there are two intermediaries between the producer and the consumer.
The first intermediary is a wholesaler who purchases products in bulk from the producer and
sells them in smaller quantities to retailers. The second intermediary is the retailer who then
sells the products to the end consumer.
• 4. Three-level channel or agent, wholesaler, and retailer
In a three-level channel, there are three intermediaries involved in the
distribution process. The first intermediary is an agent or broker who
acts on behalf of the producer, connecting them with wholesalers. The
wholesalers purchase products from the producer and sell them to
retailers. Finally, the retailers sell the products to consumers.
CHANNEL DESIGN AND
MANAGEMENT
What is Channel Design?
• Channel Design is a design or plan prepared for the distribution and
movement of goods and services from the manufacturer to the
customer.
• Thus, Channel Design Decisions refer to the strategic choices and
actions taken by a company to create an effective distribution and
communication network for its products or services
• This decision includes choosing the number of mediators, the level of
control, and the flow of goods or services from the manufacturer to the
end buyer.
1.Direct Distribution Channels: In direct channels, the producer sells directly to the end
consumer without intermediaries. Examples include:
1. Manufacturer-owned stores
2. Online stores
3. Sales force selling directly to customers
2.Indirect Distribution Channels: In indirect channels, intermediaries such as wholesalers,
retailers, or agents are involved in the distribution process. Examples include:
1. Wholesaler to retailer to consumer
2. Manufacturer to retailer to consumer
3. Manufacturer to agent to wholesaler to retailer to consumer

3. Multi-channel Distribution: This approach involves using multiple distribution channels

to reach customers. For example, a company might sell through its website, retail stores, and
also through distributors.
4.Specialized Channels: Some products or industries may have specialized distribution
channels tailored to their needs. For example, pharmaceuticals may have distribution
channels involving pharmacies and healthcare providers.
What is logistics management?

• Logistics management is the process of planning, implementing,

and controlling the movement of goods, services, and
information between the point of origin and the point of
consumption.
• It involves the integration of various activities, including
transportation, inventory management, warehousing, material
handling, packaging, and security.
• The goal of logistics management is to ensure that goods are
delivered to the right place, at the right time, and in the right
condition, while minimizing costs and maximizing efficiency.
• This involves optimizing the supply chain to achieve the best
balance between customer service and cost-effectiveness.
What is logistics management?

• “Getting the right product, in the right quantity, in the

right condition, at the right place, at the right time, to
the right customer, at the right price.”
Types of Logistics Management

1. Supply management
• Supply management involves the planning, procuring, and coordination of
materials that are needed in a certain location at a specific time to support
production.
2. Distribution and material handling
• This movement generally involves moving stored materials or products for
further manufacturing or distribution. This kind of logistics involves a lot of
loading, unloading, tracking, and keeping stock of materials.
• 3. Product management
Product management in logistics involves planning, management, and control of
the different stages of production within a company.
4. Customer service management
Good customer service management in logistics depends on excellent
communication and timely and damage-free deliveries
Managing marketing communication
(Promotion)
• Managing marketing communication involves coordinating various
activities and channels to effectively convey messages to target
audiences and achieve marketing objectives.
• Promotion is a marketing tool, used as a strategy to communicate
between the sellers and buyers
• The aim of promotion is to increase brand awareness, create interest,
generate sales or create brand loyalty.
• It is one of the basic elements of the market mix, which includes the
four Ps, i.e., product, price, place, and promotion.
• Marketing communication plays a pivotal role in the
success of any business.
• It serves as a bridge between a company and its target
audience, facilitating the exchange of information,
ideas, and offerings
ROLE OF MARKETING
COMMUNICATION
• Building Brand Awareness
• Driving Sales
• Creating Customer Engagement
• Educating Consumers
• Differentiating from Competitors
• Managing Reputation
Managing Integrated Marketing Communication

• Integrated marketing communication is an approach to promote

products and services (brand promotion) where various modes of
marketing are integrated so that similar message goes to the customers.
• According to integrated marketing communication, all aspects of
marketing communication work together to promote brands more
effectively among end-users and also for better results.
• Brands are promoted through advertising, sales promotions, banners,
hoardings, public relations, social networking sites and so on
simultaneously to increase brand awareness among potential end-users.’
Common methods of marketing
communication are described below:
• Advertising: Any paid form of presenting ideas, goods, or services by an
identified sponsor.
• Public relations (PR): The purpose of public relations is to create goodwill
between an organization (or the things it promotes) and the “public” or target
segments it is trying to reach. This happens through unpaid or earned
promotional opportunities: articles, press and media coverage, winning awards,
giving presentations at conferences and events,
• Personal selling: Personal selling uses people to develop relationships with
target audiences for the purpose of selling products and services. Personal selling
puts an emphasis on face-to-face interaction, understanding the customer’s
needs, and demonstrating how the product or service provides value.
• Sales promotion: Sales promotions are marketing activities that aim to
temporarily boost sales of a product or service by adding to the basic value
offered, such as “buy one get one free” offers to consumers or “buy twelve cases
and get a 10 percent discount” to wholesalers, retailers, or distributors.
• Direct marketing: This method aims to sell products
or services directly to consumers rather than going
through retailer. Catalogs, telemarketing, mailed
brochures, or promotional materials and television
home shopping channels are all common traditional
direct marketing tools.
What is PR?

• PR is short for "public relations" and refers to the strategic

communication from an organization to the public to maintain or
cultivate public image,
• Its main goals are to spread important company news or events, keep a
good image of the brand,.
• The main goal of public relations is the upkeep of the brand's
reputation and the development of cordial relations with the public and
other important stakeholders.
• This makes the brand seem trustworthy, successful, important, and up-
to-date.
Functions of Public Relations

1. Handling publicity
2. Issuing news of activities to external audiences
3. Establishing and maintaining contacts with the mass media
4. Handling responses to inquiries from the mass media
5. Coordinating media conferences and tours
6. Crisis Management
7. Writing and distributing press releases.
Tools Of PR

• Press Releases
• Events
• Contests
• Publications
• Media
Major sales
promotion tools

• Free samples
• Coupons
• Exchange scheme
• Installment sales
• Discounts
 The "5 Ms of Marketing
• The "5 Ms of Marketing" is a framework that helps businesses organize and optimize their
marketing efforts.
• Mission: The mission outlines the purpose and objectives of the company's marketing
activities. It defines what the company aims to achieve through its marketing efforts, such as
increasing market share, building brand awareness, or expanding into new markets.
• Money: What is your budget for the campaign? How much will you spend on each element of
the campaign?
• Message: Crafting a compelling message is essential for communicating with the target
audience effectively. The message should clearly communicate the value proposition of the
company's products or services and resonate with the needs and desires of the target market.
• Media: Media refers to the channels and platforms used to reach the target audience. This
includes both traditional and digital marketing channels such as television, radio, print
advertising, social media, email marketing.
• Measurement: Measurement involves tracking and evaluating the performance of marketing
activities to determine their effectiveness and return on investment (ROI).
DIGITAL MARKETING CHANNELS
1.Email Marketing: Sending promotional messages or newsletters directly to
individuals via email.
2.Direct Mail: Sending physical promotional materials like postcards, catalogs,
or letters to a targeted list of addresses.
3.Telemarketing: Contacting potential customers via telephone to promote
products or services.
4.SMS Marketing: Sending promotional messages or offers directly to
customers' mobile phones via text messaging.
5.Social Media Marketing: Promoting products or services directly to followers
on social media platforms like Facebook, Instagram, Twitter, etc.
6.Catalog Marketing: Distributing printed catalogs showcasing products
directly to customers, often through mail or in-store distribution.
7.Content Marketing: Creating valuable content such as blog posts, articles, or
videos with the aim of attracting and engaging potential customers.
Interactive marketing
• Interactive marketing involves engaging with customers
in a two-way dialogue, where both parties actively
participate in the communication process.
• Unlike traditional marketing methods where information
flows in one direction (from the company to the
customer), interactive marketing encourages customer
involvement and feedback, creating a more
personalized and engaging experience.
Interactive marketing
communication options:
• Customer Engagement: Interactive marketing focuses on actively involving customers in the
marketing process, such as through quizzes, polls, surveys, contests, or interactive games.
• Social Media Engagement: Social media platforms provide an ideal environment for interactive
marketing, allowing companies to interact directly with customers through comments, likes,
shares, and direct messages.
• User-Generated Content (UGC): Encouraging customers to create and share their own content
related to the brand can be a powerful form of interactive marketing
• interactive Websites and Apps: Websites and mobile apps can incorporate interactive elements
such as quizzes, product configurators, chatbots, or personalized recommendations to engage
users and provide a more interactive browsing experience.
• Word-of-mouth marketing:It is the communication between consumers about a product,
service, or company.
• viral marketing : It spreads from person to person and from channel to channel, earning
attention at incredible speed.
Advantages of Interactive Marketing
• Increased Engagement: Interactive marketing encourages active
participation from customers, leading to higher levels of engagement
compared to traditional marketing methods.
• Personalization: Interactive marketing allows for personalized
experiences tailored to individual preferences and behaviors. By
collecting data on customer interactions and preferences, companies
can deliver targeted content and offers, enhancing the overall
customer experience.
• Immediate Feedback: Interactive marketing provides an opportunity
for companies to gather immediate feedback from customers.
• Building Relationships: Interactive marketing helps foster stronger
relationships between brands and customers by creating opportunities
for two-way communication and interaction.
Disadvantages of Interactive
Marketing
• Technical Challenges: Interactive marketing relies on technology to
deliver engaging experiences to customers.
• Privacy Concerns: Collecting and using customer data for
personalized marketing purposes raises privacy concerns among
consumers.
• Audience Participation Limitations: Not all customers may be
willing or able to participate in interactive marketing activities. Factors
such as technological literacy, accessibility, and time constraints can
limit audience participation and engagement.
• Resource Intensive: Developing and implementing interactive
marketing campaigns can be resource-intensive, requiring investment
in technology, creative content, and manpower
 Major steps in effective selling
• Identifying potential customers : The first step in effective selling is identifying potential
customers, also known as prospects. This involves researching and identifying individuals or
organizations that may have a need for your product or service.
• Building Rapport and Trust: This can be achieved through active listening, empathy, and
demonstrating genuine interest in the prospect's needs and concerns.
• Discovery and Needs Assessment: Effective selling involves understanding the prospect's
needs, challenges, and goals.
• Presenting Solutions: Once the salesperson has a clear understanding of the prospect's needs,
they can present their product or service as a solution to those needs.
• Handling Objections: It's common for prospects to raise objections or concerns during the
selling process. Effective salespeople anticipate and address objections proactively by
providing relevant information, addressing misconceptions, and offering solutions to overcome
barriers to purchase.
• Closing the Sale: The closing stage is where the salesperson asks for the
prospect's commitment to move forward with the purchase. This can
involve asking for the sale directly, offering incentives or discounts, or
• Follow-Up and Relationship Building: After the sale
is closed, the salesperson should follow up with the
customer to ensure satisfaction, address any post-sale
concerns, and cultivate a long-term relationship
THANK YOU…..