hannels of Distribution
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hannels of
Distribution
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Distribution Channel
The chain of businesses or intermediaries through which agood or service passes until reaches the end consumer.
A distribution channel can be as short as being direct from the
vendor to the consumer or may include several inter-connected(usually independent but mutually dependent)
intermediaries such as wholesalers, distributors, agents,
retailers.
Each intermediary receives the item at one pricing point and
moves it to the next higher pricing point until it reaches the
final buyer. Also called channel of distribution or marketing
channel .
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Producer Consumer
Producer Retailer Consumer
Producer Wholesaler Retailer Consumer
Producer Agent Wholesaler Retailer Consumer
Channel of Distribution 1
Channel of Distribution 2
Channel of Distribution 3
Channel of Distribution 4
DISTRIBUTION CHANNELS
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Distribution channel
of
FM G Goods
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Definition of FMCG Goods
FMCG are products that have a quick shelf turnover, at
relatively low cost and don’t require a lot of time and
financial investment to purchase. The margin of profit
on every individual FMCG product is less.Examples: Lux soaps, Colgate, Surf excel, Pepsi, Maggi
etc.
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Characteristics of FMCG goods
• From the consumers' perspective:
– Frequent purchase
– Low involvement (little or no effort to choose the item
Products) – Low price
• From the marketers' angle:
– High volumes
– Low contribution margins
– Extensive distribution networks
– High stock turnover
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Dabur
Factory
Carry & Forward
agent
Super Stockist Stockist Institute &
Modern
tradeRural Stockist
(INDIRECT)
Consumer
Wholesaler Retailer Wholesaler Retailer
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Profit Margins
Carrying & Forwarding Agent 1.5%
Super Stockist 2 - 2.8%
Distributor/ Stockist 5.8%
Re- Distributor / Sub – Stockist 3.8%
Wholesaler 1.5 – 2%
Retailer 7 – 8 %
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SAMPLE PRICES AT VARIOUS LEVELS
C&F
agent
Super
Stockist
Distributor
/Stockist
Sub-Stockist Wholes
aler
Retailer
Landing
Price
33.60 34.08 34.08 34.70 36.05 36.77
Selling
Price
34.08 34.70 36.05 36.05 36.77 39-45
MRP 45
Dabur Amla hair Oil – 100ml
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Typical Distribution of P&G Products
Manufacturers (PGHH Ltd.India)
Marketing Agents - State wise
Retailers/Wholesalers/Distributors
Chemists Shops, Provision Stores ,
Retail Outlets, Big Markets etc
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Distribution Channel At The Bidadi
Plant BangaloreBidadi Plant
Targeted Customer In &
Around Bangalore City
Hebbal
Depot
Delivery
Trucks
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WHITE GOODS
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•
Heavy consumer durables such as airconditioners, refrigerators, stoves, etc., which
used to be painted only in white enamel
finish.
• Despite their availability in varied colors now,
they are still called white goods. See also
brown goods.
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TYPES
Major appliances may be divided as:
Refrigerators
Stoves
Washing equipment
Miscellaneous like AC, Computer, Television,
Water heater, Amplifiers.
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• White GoodsDistribution Network
Customers
Distributor OrDealer
Retailer
Producer
Service backup
Own or
Franchise
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SAMSUNG DISTRIBUTION CHANNEL
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Company Manufacturing
Unit
C&F Agent
Distributor
Franchised
OutletsBig Retailers Retailer Chains
Small
dealers/retailer
Digital
Plazas
Digital
Homes
Digital
Worlds
Customers
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B B CHANNEL
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Business to Business (B2B) marketing refers to a market where
other businesses, not end consumers, are the purchasers of the
goods and services.
B2B describes commerce transactions between
businesses, such as between a manufacturer and a wholesaler,
or between a wholesaler and a retailer
For example, a chair manufacturer may buy steel for the frame from one
company, wood from another, and the fabric from another
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CH NNEL STRUCTURE FOR
SELLING THE REFRIGER NT
G S
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Manufacturer
Direct Channels Indirect channels
Direct
Sales
Online
MarketingTelemarketing Manufacturers
Representatives
IndustrialDistributors
Customer Segments
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Distribution channel at CEAT Tyres
CEAT has one of the largest distribution network for tyres in India. It has divided the
Indian sub continent into 33 regions and has set up a Regional Office for each region.Clearing and Forwarding agents (C&FAs) are attached to them. Often the larger regions
have 2 or 3 or more C&FA’s to cover the region properly. The total number of C&FA’s
across the country is 112.
The basic operating structure of the Ceat Ltd comprises of the following entities:
FactoryRDC
C&FA
Dealers
CEAT has three level distribution structure. The factory supplies goods to the RDCs
(Regional Distribution Centers) and from these RDCs the goods are transferred to CFAs(Carrying and Forwarding Agents) which act as godowns for distribution to the dealers.
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• Services Sector
Distribution Network
Customers
Producer
Franchise/
Agent
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Distribution Channel
for Insurance
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• Insurers market various insurance covers either directly or through various
distribution The marketer in the distribution network is in direct interface
with the prospect and the customer.
• An increasing number of insurers are using multiple distribution channels
as they continue to balance the needs of different groups of consumers
against the cost of distributing their products and services. When it comes
to insurance distribution channels, one size does not necessarily fit all.
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Channels In the Insurance Markets
• Personal Distribution Systems
Agencies of different models and brokerages, banc assurance,
and work site marketing
• Direct response distribution systems
Client purchases the insurance directly
Internet, telemarketing, direct mail, call centers, etc..,
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Types of Insurance
• Life Insurance
• Health Insurance
• Agriculture Insurance
• Vehicle Insurance
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Insurance
CompanyConsumer
InsuranceCompany
Agents Consumer
Channel of Distribution 1
Channel of Distribution 2
DISTRIBUTION CH NNELS
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Direct Channel
Insurance
Companies Consumer
Internet
DirectMarketing
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Indirect Channels
Banc
assurance
Trade
Specific
NGO’s
Post
Offices
Insurance
Brokers
CustomerInsurance
Company
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Bharati xa Life Insurance
Distribution Head
Direct Sales BrokersLife
Advisors
Other
Channels
Consumer
ll l
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Cellular Services
Idea CellularService Provider
Hardware Software Services
Own Sales
Team
Franchise/
Dealers
Consumers
d i
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• DELL
Hardware Services
Customers
Service
Provider
Services BackUp
Franchisee/Own/
Reseller
Dealer/
Reseller
Own Sales
Team
H i li S
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Hospitality Sector
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Marketing Intermediaries of Hotel Industry
• Travel Agents
• Tour Wholesalers
• Specialists• Hotel Reps
• Concierges
• National, State, and
Local Agencies
•
Consortia andReservation Systems
• Global Distribution
Systems• Internet
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Airlines
Distribution Network
Clients
Airlines
Direct Distribution-Call center or
website
Computer
Reservation
Systems
Online Travel
Agents
Brick-and-Motor
travel agents
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Selecting a distribution channel is an important aspect of building a competitive advantage for businesses of every
size.
The right distribution channel ensures that customers indifferent locations around the country, or around the
world, can buy your products and get the right level of
service from your company.
Conclusion: