30-04-2012, 01:29 PM
INDUSTRIAL DISTRIBUTIOIN CHANNELS AND MARKETING LOGISTICS
Distribution Channels and Logistics.ppt (Size: 388.5 KB / Downloads: 31)
Alternative Channel Structures
Industrial channel structures include both direct and indirect channels.
Direct Channels
Examples are direct selling through company sales force and direct marketing through on-line marketing, telemarketing and direct mail. Direct channels are used typically when (i) Transaction value is large, (ii) Technical & commercial negotiations are held at various levels (iii) Buying process takes a long time (iv) Buyers want to buy directly from manufacturers.
Indirect Channels
Consists of intermediaries like distributors / dealers, manufacturer’s reps / agents, value-added resellers (VARs), brokers and commission merchants.
Indirect channels are generally used when (i) Value of transaction / sales is low, (ii) The manufacturer’s resources are limited,(iii) Customers are geographically dispersed, (iv) Buyers purchase many items in one transaction.
Types of Intermediaries
1. Industrial Distributors / Dealers
They perform many functions like buying, storing, promoting, financing, selling, transporting and servicing certain geographic market, & are given discounts.
Major categories are (i) General – line distributors, (ii) Specialized distributors, and (iii) Combination house.
2. Manufactures’ Representatives / Agents
They perform functions like promoting manufacturers’ products / services, getting orders, and colleting market information. They are independent business firms, representing various manufacturers whose products complement one another but are not competitive.
They are paid commission on the value of sales or orders booked. They do not buy, store or finance transactions.
SUMMARY
Industrial channel structures include direct and indirect channels
Types of industrial intermediaries are: industrial distributors / dealers, manufacturers’ representatives (or agents), value – added resellers (VARs), brokers, and commission merchants
Procedure of channel design includes: developing channel objectives, analyzing channel constraints and tasks, identifying channel alternatives, evaluating alternatives and selection of the channel (s)