BBIT 2105 TOPIC 5 - PLACE DECISIONS APR TO JULY 2020 03 06 2020.ppt

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|BBIT 2105TOPIC 6 - DISTRIBUTION DECISIONS[email protected]
|Learning ObjectivesTo understand why companies use distribution channelsand also appreciate the functions that these channelsperformTo know the major channel options that are available to acompanyTo understand how companies select, motivate andevaluate channel members2
What are Marketing Channels?
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|Channel OptionsCompanies have option between: -i. Direct distribution– selling products directly to thefinal consumersNot feasible in most circumstances due to financialimplications, dispersed customer base etcIs advisable where company handles key customersthat they wish to have personal relationship with e.ginstitutions(Universities,Hotels,Restaurants,Hospitals, major supermarket chains etcThesearecustomersveryimportanttotheorganization that not only account for bulk of companysales but may also be very ‘important’ in the society4
|Channel Optionsii.Indirect distributionThis is the use of intermediaries (middle men) toavail the products/services to the consumersCan be exclusive distributors, wholesalers, retailersor agentsThey can either take ownership of the products (inwhich case they purchase and hold stock) orOnly negotiate for purchase of the products/serviceson behalf of the producers/buyers and earn acommission for the services5
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|Nature of ChannelsNumber of Channel levelsThe number of intermediary levels indicates the length ofa marketing channel1.Zero level channels-(Producer to consumer)- Door todoor sales, telemarketing, manufacturer owned stores2.One level channels-(producer-retailer –consumer)Contains one selling intermediary-retailer.Common in the marketing of agricultural produce.Large supermarkets are also able to buy direct frommanufacturers due to the high volumes purchased7
|Nature of channels cont..3.Two level channelProducer –Wholesaler-retailer-consumer-(Indirect Channel)-Two middlemen involved (wholesaler and retailer)Utilized highly in FMCG marketing due to their needfor wide distribution and availabilityProducers lose more control and face greaterchannel complexity as additional channel levels areadded8
|Nature of channels cont..

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Term
Summer
Professor
d john
Tags
Marketing, producer

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