BY: Manoj Kumar Mishra M.B.A.

2nd SEMESTER

CHANNEL- A CONCEPT
A

Marketing channel is a set of organizations involved in the process of making product or services available for use or consumption.

FACTORS-:
Marketing Factor Manufacture Factor Product Factor Competitive Factor Middleman Factor or Intermediary Factor

Marketing Factors
Number of consumer Location Purchase Pattern Market Size Product Order Size

Number of consumer
When the number of consumer is large in size as it happens in the case of FMCG, the manufacturer opt for a relatively indirect channel because direct channelization would involve enormous distribution cost. And if number of consumer is limited, the marketing company will opt direct channel.

Location
Where consumer are concentrated in a small geographic location it is always advantageous to opt for a direct channel owing to the lower cost of selling them direct. But when consumer are concentrated over a wide area with a thin density of population then indirect selling would be the right choice.

Purchase Pattern
where consumer purchases are frequent and small in size, it is advantageous to select an indirect channel because it facilitates maximum sales exposure. And if consumer purchases goods in large quantity with less frequency, then direct channel will be more advantageous .

Market Size
Marketing size dictate the nature of channel which is selected by organization. If market size is large we need intermediaries and if market size is small then direct marketing will be more useful.

Product Order Size

If product order size is high in quantity then producer himself attend. He will not want to loose opportunity.

Product Factors
Industrial / Consumer product Perishable Nature Seasonality Technicality

Industrial / Consumer Product

When the product being manufactured and sold is industrial in nature, direct channel is useful because of the relatively small number of customers need for personalized attention, customer training requirements and after sale servicing.

Perishable Nature
When products are perishable nature, like milk, dairy products bread and meat, etc., it is useful to opt for direct channel

Seasonality
when product sale is subject to seasonal variations like woolen textile in India. In such cases intermediaries are seldom prepared undertake the function of inventory carrying and as consequence manufacturer build up indirect distribution channels.

Technicality
When a product is very technical and complex like computers business machines etc. the direct channel is relatively more useful.

Manufacturer Factors-:
Manufacturer may lack financial and managerial resources to take on channel operations. If manufacturer is producing a wide range of products then it will effect the selection of channel choice. Manufacturer is newly entered or he is old or established in market both are factors which are important in selecting a channel.

Competitive Factors-:
Channels which are less expensive are generally preferred. Marketing policies and strategies are also a factor to consider for selection. Alternative distribution channel may be used as a means of attaining competitive advantage Competition controls channel of Distribution.

Middleman Factors-:
Availability of Middleman Attitude of Middleman Services Provide by Middleman Market reputation and goodwill of middleman

THANK

YOU.