Chp 9 Distribution Channels.pptx

Channels of Distribution Whole selling and Retailing Study Uber, the app-based ride service that is revolutionizing urban transportation. Fast growing Uber is giving conventional taxicab and car services a real ride for their money. In just seven short years, Uber has revved up operations in hundre...

Channels of Distribution Whole selling and Retailing Study Uber, the app-based ride service that is revolutionizing urban transportation. Fast growing Uber is giving conventional taxicab and car services a real ride for their money. In just seven short years, Uber has revved up operations in hundreds of major cities in 67 countries, already booking more than $10 billion in rides annually through its massive network of more than a million drivers. Why are so many customers around the world bypassing good old taxicabs in favor of newcomer Uber? It’s all about convenience and peace of mind. No more stepping out into busy city streets to wave down a passing cab. Instead, Uber’s smartphone app lets passengers hail the nearest cab or limo from any location, then track the vehicle on a map as it approaches. The Uber app gives riders an accurate estimate in advance of the fare to their destinations. Uber has raised more than $10 billion in venture capital and currently has a valuation of more than $62 billion, making it the world’s most valuable privately held technology firm. Good distribution strategies can contribute strongly to customer value and create competitive advantage for a firm. But firms cannot bring value to customers by themselves. Instead, they must work closely with other firms in a larger value delivery network Distribution Channel Channels decide where the product can be sold and how it can be sold There are 3 major uses of channels 1. Logistics: how to carry products from one place to another 2. Finance: where and how the money is being spent 3. After-sales services: whenever repairs are needed, the customers do not approach the company directly rather service centers are visited Types of Distribution Channels 1. Direct 2. Indirect  Direct Distribution Channel Selling is done directly by the manufacturer to customers This distribution method directly connects producers to buyers, be it through online platforms, stores, trade shows, or mail orders. It’s a direct channel that bypasses any middlemen, allowing companies to control their product’s journey fromDisadvantages Advantages of creation to consumer’s of hands Strategies For Examples : Direct Distribution Direct Distribution Direct Channel of Distribution Tesla Customer High Operational Online Sales Warby Parker (eye wear) Relationship Control Costs Platforms Apple Faster Response to Demanding Time and In-Store Retail Nike Feedback Effort Brand Differentiation Customer Acquisition Company-Owned Challenges Retail Outlets Data Goldmine Logistics Hassles Mail Order or Catalog Sales Enhanced Control Limited Market Reach Online Sales  Indirect Distribution Channel In this distribution method, the manufacturer relies on intermediaries – such as wholesalers, distributors, or retailers – to get its products into the hands of consumers. Instead of dealing directly with customers, the manufacturer delegates aspects of the sales process to these intermediaries. These middlemen take care of tasks like warehousing, selling, and delivery, freeing the manufacturer from certain responsibilities and costs associated with selling directly to end-users. Parties involved include i. Exporter ii. Importers iii. Wholesalers iv. Retailers v. Agents or Brokers vi. Distributors Examples Samsung Coca Cola Procter and Gamble (P & G) Indirect Distribution Channel Advantages of Disadvantages of Strategies For Indirect Distribution Indirect Indirect Distribution Distribution Extended Market Reduced Control Selective Distribution Reach Cost Efficiency Profit Sharing Intensive Distribution* Local Expertise Dependency on Exclusive Intermediaries Distribution** Existing Supply Chain Limited Relationship Franchising with Customers Focus on Core Competing for Strategic Alliances Business Attention  Designing Channels Marketing channel design calls for 1. Analyzing consumer needs 2. Setting channel objectives 3. Identifying major channel alternatives 4. Evaluating the alternatives