Description
The PPT explains the 8 primary distribution channels, industrial marketing channels, characteristics of industrial distribution network.
SPECIAL NATURE OF INDUSTRIAL DISTRIBUTION CHANNEL PARTNERS
The Distribution Mix
? Combination of distribution channels by which a firm
gets its products to end users
Intermediary (Middlemen)
Individual or firm that helps to distribute a product
Wholesaler
Intermediary who sells products to other businesses for resale to final consumers
Retailer
Intermediary who sells products directly to consumers
Eight Primary Distribution Channels
Channel 1: Channel 2: Channel 3: Channel 4: Channel 5: Direct Distribution of Consumer Products Retail Distribution of Consumer Products Wholesale Distribution of Consumer Products Distribution through Sales Agents or Brokers Distribution by Agents to Consumers and Businesses
Channel 6: Direct Distribution of Business Products Channel 7: Wholesale Distribution of Industrial Products
Channel 8: Wholesale Distribution to Business Retailers
Channels of Distribution
Producer Agent/Broker Wholesaler Channel 1 Channel 2 Channel 3 Retailer Users
Consumer Consumer Consumer
Consumer Consumer/ Business Business Business Business
14 - 4
Consumer Channels
Channel 4 Channel 5 Channel 6
Channel 7 Channel 8
Consumer/ Business Channel Business Channels
Highlights
? There are no retailers in Industrial distribution network ? Direct marketing and relationship building is
emphasized a lot in industrial marketing which require efforts from channel partners ? Quantities are bulk so it requires more resources from channel partner’s side ? Requires more discipline from partners side because delay in any processes may cause penalties or cancellation of orders ? Internet’s involvement in buying process may reduce the importance of intermediaries in future but still some partners will be required by the company for distribution of goods
Wholesaler
? As we know that it requires more resources this ? ? ?
?
means that the investments are high Quantities are more so more storage space is required Relationship and contacts are key to selling so it is required in a wholesaler Wholesaler is required to give services and maintenance to the buyer, so it should have those kind of facilities Wholesaler may keep products of one or more companies which are complimentary or substitute
Intermediaries
? Intermediaries or agents have the same purpose as in
consumer products distribution because they are appointed to solve the problem of assortment, place and time ? Intermediaries also helps buyer and supplier to meet or finalizing the deal ? It also gives buyer a chance to choose between available suppliers say a typical hardware shop has different products of different companies so it can help customer to choose one
Logistics
? Mainly outsourced to third party because of different
locations for example Caparo manufactures parts for different manufacturers of overseas automobile manufacturers so its logistics are outsourced to third party because is not their core competency ? Timely delivery is a key to success because if one product reaches late it affects the production of the buyer, penalties to suppliers are also very high so it requires greater discipline ? Sometime nature of product may require special kind of logistic vehicle like to transport wind mills, or special parts
Reverse Channel
? In Industrial marketing you also requires reverse
channel to bring back the products back to manufacturer ? Ex. Canon Photocopy machine requires cartridge which requires refilling time to time or when the empty or for reuse ? Servicing and maintenance of sold products can also require this channel.
Thank You
doc_416462923.pptx
The PPT explains the 8 primary distribution channels, industrial marketing channels, characteristics of industrial distribution network.
SPECIAL NATURE OF INDUSTRIAL DISTRIBUTION CHANNEL PARTNERS
The Distribution Mix
? Combination of distribution channels by which a firm
gets its products to end users
Intermediary (Middlemen)
Individual or firm that helps to distribute a product
Wholesaler
Intermediary who sells products to other businesses for resale to final consumers
Retailer
Intermediary who sells products directly to consumers
Eight Primary Distribution Channels
Channel 1: Channel 2: Channel 3: Channel 4: Channel 5: Direct Distribution of Consumer Products Retail Distribution of Consumer Products Wholesale Distribution of Consumer Products Distribution through Sales Agents or Brokers Distribution by Agents to Consumers and Businesses
Channel 6: Direct Distribution of Business Products Channel 7: Wholesale Distribution of Industrial Products
Channel 8: Wholesale Distribution to Business Retailers
Channels of Distribution
Producer Agent/Broker Wholesaler Channel 1 Channel 2 Channel 3 Retailer Users
Consumer Consumer Consumer
Consumer Consumer/ Business Business Business Business
14 - 4
Consumer Channels
Channel 4 Channel 5 Channel 6
Channel 7 Channel 8
Consumer/ Business Channel Business Channels
Highlights
? There are no retailers in Industrial distribution network ? Direct marketing and relationship building is
emphasized a lot in industrial marketing which require efforts from channel partners ? Quantities are bulk so it requires more resources from channel partner’s side ? Requires more discipline from partners side because delay in any processes may cause penalties or cancellation of orders ? Internet’s involvement in buying process may reduce the importance of intermediaries in future but still some partners will be required by the company for distribution of goods
Wholesaler
? As we know that it requires more resources this ? ? ?
?
means that the investments are high Quantities are more so more storage space is required Relationship and contacts are key to selling so it is required in a wholesaler Wholesaler is required to give services and maintenance to the buyer, so it should have those kind of facilities Wholesaler may keep products of one or more companies which are complimentary or substitute
Intermediaries
? Intermediaries or agents have the same purpose as in
consumer products distribution because they are appointed to solve the problem of assortment, place and time ? Intermediaries also helps buyer and supplier to meet or finalizing the deal ? It also gives buyer a chance to choose between available suppliers say a typical hardware shop has different products of different companies so it can help customer to choose one
Logistics
? Mainly outsourced to third party because of different
locations for example Caparo manufactures parts for different manufacturers of overseas automobile manufacturers so its logistics are outsourced to third party because is not their core competency ? Timely delivery is a key to success because if one product reaches late it affects the production of the buyer, penalties to suppliers are also very high so it requires greater discipline ? Sometime nature of product may require special kind of logistic vehicle like to transport wind mills, or special parts
Reverse Channel
? In Industrial marketing you also requires reverse
channel to bring back the products back to manufacturer ? Ex. Canon Photocopy machine requires cartridge which requires refilling time to time or when the empty or for reuse ? Servicing and maintenance of sold products can also require this channel.
Thank You
doc_416462923.pptx