An organisation needs to take into consideration what is desirable while not losing focus on what is feasible, affordable and available. The route that the product takes on its way from production to the consumer is important because a marketer must decide which route or channel is best for his particular product. The channel system of an organisation evolves in response to local opportunities and conditions. Drive is a basic instinct. 2) Price Stability:. Marketing Channel Design 8. For example, if an organisation sells to customers that are within the territory of the agents, this can lead to a conflict. iii. ii. Most services are sold directly from provider to the consumer or industrial buyer. d) Manufacturers – Wholesaler – Consumer: Here, retailers do not exist. Various channel patterns are discussed below: For example, cosmetics, farm products like fresh fruits, vegetables, encyclopaedia, many innovative products through home shopping, etc. Take the example of a pain reliever like Aspirin. Example- teleshopping network, Proactive acne kit, etc. (a) Manufacturer – C&F Agent – Redistribution Stockist – Retailer – Consumer – 4 Levels. Conflicts can be functional or dysfunctional. While middlemen can also be won over to carry a company’s product line if the company is willing to pay more commission than its competitors, the power might shift to the channel. This system requires eight different contacts. This requires six contacts. Some big and reputed service providers train the individuals to perform a service and franchise their services, e.g., employment Agencies, Travel Agencies, etc. This does not mean that perishables can be sold only in areas close to the place of production. Example- Pepsi and Coke. Effective communication plays an important role in business to inform and influence behavior. Importance of distribution channels: Manufacturers may always do not always need distribution channels. Channel choices themselves depend on the company’s marketing strategy with respect to segmentation, targeting, and positioning. The social media in this case refer to varied modern channels of communication and transport in the world. Introduction:
As such, the use of intermediaries is mainly to make the goods available and accessible to target markets. There are three types of Contractual VMS: a. 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. If a person goes without water for four hours, he will have an urge or drive arising out of the thirst to search for a goal which will reduce the intensity of the drive. Most firms follow a multi-channel approach to meet the requirements of the different segments of the market. This is a popular in case of consumer durables such as textiles, readymade garments, etc. Introduction An example of this type of conflict is if an organisation appoints two agents for the same territory. Examples of this type of channel include door-to-door sales, mail order, telemarketing, TV selling, and manufacturer-owned stores. Type of the product – Depending upon the nature of the product, the length of the channel needs to be decided. b. Samsung in producing Samsung Galaxy S5, ensures that what is offered to the market is more than a mobile phone, email and web-browsing device in the high mobile phone saturated market. Marketers have traditionally focused on the “downstream” side of the supply chain—on the marketing channels (or distribution channels) that look forward toward the customer. MARKETING CHANNELS - FOR NATIONAL ECONOMY ABSTRACT The paper starts from the importance of merchandise distribution and distribution channels and mutual relationships of the participants in them. I have chose Louis Vuitton(LV) as my topic to continue my research and report.
Middlemen have a role in providing information about the market to the manufacturer. Designing the marketing channels is a task in which the manufacturer has to take into consideration several factors. In any case channel length does not exceed 1 level. Conflict. When deciding the length of the channel there are several factors that need to be taken into consideration. ii. Functions 4. Retailers are found only in consumer goods channels. A marketing channel system decisions affects the other marketing decisions also, and therefore are among the most critical decisions. This is another marketing System emerging in which two or more unrelated organisations come together and pool their resources to exploit a marketing opportunity. Example- Eureka Forbes, Zenith computers. Marketing channels illustrate the organizations that work together tog get your product and service to the end-user. These are the situational cues and are very effective for products bought on an impulse rather than as well-thought out choices. If satisfied, the consumer starts behaving like the proverbial Povlov’s dog and reaches the stage of automatic response behavior. Entrepreneurs do not normally realize the importance of marketing until they, Chapter 6
There are several middlemen’s who are involved in the distribution system of businesses. 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. Marketing channels are the ways that goods and services are made available for use by the consumers. These marketing channels provide them with the opportunity. For this purpose, marketing channels are used to take the products from the manufacturing organisations to the final consumers.