Distribution Chanel: Function of Channel

Distribution Channel

Distribution Channel is a set of different independent organization(intermediate) which involve in process of making product(Service) available for customers.

Functions of channel

• gather information about current customers, competitors, and other actors and forces in the marketing environment
• Place orders with manufacturers.
• Acquire the funds to finance inventories at different levels in marketing channel.
• Assume risks connected with carrying out channel work
• Provide for the successive storage and movement of physical products.
• provide for buyers' payment of their bills through banks and other financial institutions.

Design Channel

Step1: Analyzing Customers' desired service output levels

Target customer want:

Lots size: can buying large size, a household wants a channel that permits buying a lot size of one.

Waiting and delivery time: Customer prefer faster and faster delivery channel.

Spatial convinces:  Specially for Indians, taking order on phone and give home delivery.

Product variety: Customers prefer a grater assortments because more choices increase the chance of finding what they need.

Service backup: credit service, repairs provide by channel.

Step2: Establishing Objectives and Constraints

Channel objective in terms of targeted service output level. Channel arrange like minimize total channel costs and still provide desired levels of service outputs.  Channel objective vvary with product characteristics.

Step3: Identifying and evaluating major channel alternatives

Company have to chose wild verity of channel to reach customers, Like, sales force, distributors, dealers, direct mail, telemarketing, and the internet. A channel alternative is described by three elements:  the types of available business intermediaries, the number of intermediaries needed, and the terms and responsibilities of each channel member

Role of Channel members

Retailer: Organization that sell product direct to the customer. Marketing of companies product by put holding, lift let, Brochures.

Wholesalers:  Organization that purchase product from manufacture or industrial distributors and sell to reseller. Wholesalers, bring risk, carry large stock, promote companies, match supply and demand, collect market information.

Industrial Distribution: Example include Business to Business marketing, selling product to industrial suppliers.

Why Channel Members:

Reduce exchange time: exchange time includes physical goods, payment, information.

Retailers' are more touch with customer, make relationship with customers and generate sales for companies'

Market information: They are dealing with real market, they provide information about market condition, product value, and about competitors

Cost Saving in specialization: wholesaler/retailers know what they do. They perform their task at lower cost, and they have own build market.