Assignment - Channel Financing

8/4/2019 Assignment - Channel Financing

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OVERVIEW

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Traditional system of trade

Trading under Channel Financing

Features of the product

7 Ps

Conclusion


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Dealers

Purchase of Goods byPresenting Cheques

Sends Cheques

Cheques Honoured/Bounced

Manufacturer

TRADITIONAL SYSTEM OF TRADE


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TRADING UNDER CHANNEL FINANCING

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Dealers

Purchase of Goods byPresenting Cheques

Sends Cheques andInvoice Details to Bank

Bank VerifiesDetails

Manufacturer

Supplies GoodsTo The Dealers


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HOW THE SYSTEM WORKS

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Smart Card to Partner Connect to Terminal

Value of Txn Entered& Data Sent to the Bank

Bank Host Confirms

Sales after CheckingThe Credit, DebitsThe Partners A/c

Sellers A/c Credited


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FEATURES & ADVANTAGES OF THE FACILITY

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Guarantee cash flow to the Company High quality of product & value added services

Facility flow of information between seller & bank electronically

Seller electronically verifies dealers position before parting with goods

Reduces cash & cheque handling risks

Buying power of dealer enhanced Bank Guarantee, Credit limit, Bill

Discounting facilities as per his eligibility


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THE PRODUCT

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Easy & Speedy settlement of the transaction

Flow of info between seller, banker and dealer

Cash carrying and credit risk taken away from company

BG facility to Dealer

Customization to the set of company & dealers


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PRICING

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Commission based on turnover from dealer and company

Interest for bill discounting/credit limit to the dealer

Negotiable with the set of company and dealers

Pricing for dealer taking into : Reputation Risk

Market Risk

Credit Risk and

Operational Risk


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PROMOTION STRATEGIES

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Personal Selling

Public Relationship

Advertising


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PLACE

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Specialised branches

can also be transacted through internet

Manpower not required much

User friendly for both bank and company

Frequent interaction for feedback


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PEOPLE

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Product details/mechanism to be clear

Need skills in interacting with the company people and dealers

Regular follow up with the customers


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PHYSICAL EVIDENCE

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Good ambience of the branch to attract big customers

Regular interaction with the customers

Calling on the customers regularly

Issues to be resolved fast

Corporate approach


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PROCESS

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Effective network system

Plan B in case of system failure

Good knowledge of product by the people

Regular review of the performance of the dealers


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Assignment - Channel Financing

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