distribution and channel management

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Channel Management in InterWood Mobel

Presented by:

Anum Iqbal

Sana Fatima

Farisa

Channel Management

• Channel is a set of interdependent organizations involved

in a process of making a product or service available for

use or consumption.

• The channel management refers to dealing with the path a

product takes from producer or manufacturer to final user.

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Interwood

• Interwood deals in wide range of furniture, appliances and flooring. The aim

of interwood is to provide optimal satisfaction to its customer. It is the market

leader  in office furniture due to it’s high quality products and diverse range.

• It has its manufacturing plant in Lahore. The warehouses are located at

Lahore and Karachi. Interwood has both local and global suppliers. The

distribution network of its products is spread in all the major cities of

Pakistan.

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Interwood

• INTERWOOD has seven product categories:

• Office Furniture,

• Home Furniture,

• Kids Furniture,

• Kitchens,

• Doors,

• Wardrobes and

• Flooring.

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Product Classification

• Standard goods

Example: chair, tables

• Standard non stock goods

Example: doors, kitchen shelves, wardrobe

• Non standard non stock goods

Customized designs for project, where high profit and cost is associated.

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Channel process

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Channel Selection Criteria of Interwood

i. Market Factor• Customer Preferences

• Geography

ii. Competition

iii.Product Factor • Cost and selling price

• Demand from customers

• Product Life Cycle

• Size and Weight

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Channel Structure

Direct Channel

Interwood

Retail Outlets

With in last 40 years,

Interwood has established 6

retail outlets all over

Pakistan. Which are located

in Karachi, Islamabad and

Lahore

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Channel Structure

• While in the time span of 1 year Interwood

has developed 10 authorized dealers all over

Pakistan to cater more customers and

penetrate the market.

Indirect ChannelInterwood

Dealers/Agents

Interwood’s Retail Outlets

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Segmentation

• The segments are made on the basis of

institutional customers and general customers.

• They are further segmented on income basis.

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Segmentation (Service Output Demand)

SOD General Customer Institutional Customer

Bulk Breaking High Low

Assortment and Variety High High

Spatial Convenience High High

After Sales Service Moderate Moderate

* Varies upon product type

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Positioning

• To provide the maximum customer satisfaction and provide best quality.

• The position strategy of the company is implemented through out the distribution strategy as well.

• They don’t position their distribution network for quick deliveries but the positioning in customer’s mind is that the distribution network will provide optimal quality.

• The optimal channel flow from resource base to end consumer is to provide quality product with in the defined lead time.

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targeting

• Interwood has targeted the upper class and upper middle class.

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Key Performance Indicator

• Quality• In Interwood there is quality control department

and a regular audit is performed.

• Quality complains can be monitored through quality control chart. It will be identified that in which operation gap exists and there is requirement for rework

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Assessment of KPI

Quality can be assessed by the help of Likert Scale through 6 categories which includes:

• Major complaints

• Quality Cost

• Product Quality

• Delivery Performance

• Customer Care

• Delivery Flexibility

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Calculation for Quality

• The proposed calculation for quality can be estimated

through weighted technique. In order to assess the quality

of varieties of sofa beds identify and weight the

characteristics of the goods to the optimal level then

measure it with other quality related issues

• An example is being shared:

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Characteristic WeightAesthetics 0.15Comfort: 0.5As sofa 0.3As bed 0.2Durabilty: 0.15As sofa 0.1As bed 0.05Convenience 0.1Waranty 0.06Safety 0.04Total: 1.00

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• KPI Strategy: To achieve zero or minimum defects related to quality.

• KPI Target: To achieve maximum customer satisfaction.

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Challenges

• Problem: Interwood has their own warehouse. The warehouse design was proposed by Agility. Inventory handling was found to be very difficult.

• Solution: Outsourced a company for material handling in their own warehouse.

• Outcome: Cost increased than earlier for stock goods

• Strategy: Now doing all services by them selves

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Recommendations

• Provide low cost product range, and make econo-

shops which will help to target B category

customers. Whereas it will help to get greater

market share and profit as it is huge segment in

Pakistan.

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THANK

YOU