Channel Distribution 2 Ok

8/9/2019 Channel Distribution 2 Ok

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CHANNEL DISTRIBUTION

THE DISTRIBUTION CHANNELSFUNCTION IS TO PROVIDE TIME AND

PLACE UTILITIES –TO MAKE THEPRODUCT AVAILABLE WHEN AND

WHERE REQUIRED.



THE DISTRIBUTION CHANNEL

• THE DISTRIBUTION CHANNEL – the way by which the product or the servicereaches the customer.

(discuss the examples of coca cola and say a luxury hotel room in a foreigncountry)

• IT IS USED TO MAKE THE PRODUCT MORE ACCESSIBLE AND CONVENIENT.Why do you think this is important. – discuss, give example of Cartier watch in the

Indian context…

• EACH ORGANISATION OR INDIVIDUAL IS KNOWN AS “MARKETINGINTERMIDIARY” OR CHANNEL MEMBER.

(consider the position of a hotel as a selling point in a resort…Goa - discuss)

• MARKETING INTERMEDIARY HAVE THEREFORE EVOLVED TO PERFORMCOST EFFECTIVELY THE BRIDGING FUNCTION,BRINGING TOGETHER BUYERAND PRODUCER.

(say if you go to a retail shop and find that a particular brand of chocolates is notavailable… the bridge is broken… the marketing function is not complete – “kit

kat” lost its marketing objectives )



SELECTION OF CHANNEL MEMBERS

• CHANNEL MEMBERS ARE INVARIABLY PROFIT ORIENTED.

• ADVANTAGES OF DIRECT SALE ARE AS FOLLOWS:

• a) IT CAN BUILD A REPUTATION FOR A HIGH LEVEL OF PERSONAL SERVICE.( say a sales agent of Hyatt … comes to your office…)

• b) IT IMPROVES CONTROL OVER PERSUASSION AND INFORMATION FLOWS

BETWEEN COMPANY AND CUSTOMER.Discuss this point

• c) IT AVOIDS PAYMENT OF FEES/COMMISSIONS TO INTERMEDIARIES.(consider buying a hotel room night from the hotel itself and through an agent… )



WHO ARE THESE INTERMEDIARIES?

• TRAVEL AGENTS. – give examples?

• TOUR OPERATORS. – give examples?

• TOURIST BOARDS. – give examples?

• TOURIST INFORMATION CENTRES -giveexamples?

• WEB BASED RESERVATION SERVICES.give examples?

• CAR RENTAL COMPANIES. giveexamples?

give examples?

Classroom activities for the students… Discuss…



How would you plan to distribute the products or the

services? - Channels

• What does the customer want? Where, how and when do you thinkhe/she wants that … - discuss?

• WRITE CHANNEL OBJECTIVES. – say, a producer of high- volumecup-cake. – How would you consider to distribute the same? – discuss( through extensive network of retailers and whole sellers…)

• DESIGN CHANNEL STRATEGY.- see next slide

• SELECT CHANNEL PARTNERS. – who can do your job – make aprofile of them. – consultants, travel agents, advisors, middlemen etc.



DESIGN CHANNEL STRATEGY.-

Select who would sell your products and how much would each of them sell andwhat approach they should adopt.

Distributors? -Retailers ? – Sub- retailers etc.?Corporate marketing companies? – Whole sellers? – Personal selling? –

Direct distribution? -

For each of the channels on the left,

determine how much

should each of them sell?

Assignment

For the Tower Hotel design the channel strategy

for the sale of rooms and the food and beverage?

Kiosks at the airport, travel agents, corporate orders for the meals…



How far do you want to market yourproduct / service?

• Depending on which market you want to be in,would you make the systems/ methods/ USPs… - strategy

Discuss – IBM - hint : top of the line, corporates, high

profiled, knowledge organisations…

Ginger Hotels Taj: - for the common man ready to pay Rs. 1000 for a night. ( Typically, TATA’s bottom-up approach of business development)

• THE GENERAL CHANNEL STRATEGY FOR EACH SEGMENT CAN BE FORMULATED, hereby .



TYPES OF DISTRIBUTION

• INTENSIVE DISTRIBUTION:

FOR EXAMPLE.A MAJOR SPANISH GROUP SUCH AS SOL.

HOTELS,TARGETING BRITISH HOLIDAYMAKERS MAY OPT FOR INTENSIVE DISTRIBUTION THROUGH AS MANY TOUR OPERATORS AS POSSIBLE. – what are the advantages?

• EXCLUSIVE DISTRIBUTION:A HIGHLY ESTEEMED GOURMET RESTAURANT MAY ELECT TO

USE DIRECT CHANNELS ONLY – why? ? ? Branding… cost

reduction…



• SELECTIVE DISTRIBUTION:

A CITY CENTRE HOTEL MAY USE SELECTIVE DISTRIBUTION TO

REACH MEETING PLANNERS . – say, how do you sell

expensive wine to rich people… wine parties…



ASSIGNMENT

• Discuss how restaurant companies are

using internet as a distribution channel. ..

Documents

Channel Distribution 2 Ok