Chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches

the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user.

[edit] Channels
A number of alternate 'channels' of distribtion may be available: Distributor, who sells to retailers Retailer (also called dealer or reseller), who sells to end customers Advertisement typically used for consumption goods Distribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc. There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors. For example, links now exist between airlines, hotels and car rental services. In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas.

[edit] Channel members

Distribution channels can thus have a number of levels. Kotler defined the simplest level, that of a direct contact with no intermediaries involved, as the 'zero-level' channel. The next level, the 'one-level' channel, features just one intermediary; in consumer goods a retailer, for industrial goods a distributor. In small markets (such as small countries) it is practical to reach the whole market using just one- and zero-level channels. In large markets (such as larger countries) a second level, a wholesaler for example, is now mainly used to extend distribution to the large number of small, neighborhood retailers or dealers. In Japan the chain of distribution is often complex and further levels are used, even for the simplest of consumer goods. In Bangladesh Telecom Operators are using different Chains of Distribution, especially 'second level'. In IT and Telecom industry levels are named "tiers". A one tier channel means that vendors IT product manufacturers (or software publishers) work directly with the dealers. A one tier / two tier channel means that vendors work directly with dealers and with distributors who sell to dealers. But the most important is the distributor or wholesaler.

[edit] The internal market

Many of the marketing principles and techniques which are applied to the external customers of an organization can be just as effectively applied to each subsidiary's,

or each department's, 'internal' customers. In some parts of certain organizations this may in fact be formalized, as goods are transferred between separate parts of the organization at a `transfer price'. To all intents and purposes, with the possible exception of the pricing mechanism itself, this process can and should be viewed as a normal buyer-seller relationship. The fact that this is a captive market, resulting in a `monopoly price', should not discourage the participants from employing marketing techniques. Less obvious, but just as practical, is the use of `marketing' by service and administrative departments; to optimize their contribution to their `customers' (the rest of the organization in general, and those parts of it which deal directly with them in particular). In all of this, the lessons of the non-profit organizations, in dealing with their clients, offer a very useful parallel. But in spite of this many, organizations prefer not to operate at a 'transfer' price because costs gradually increase as they undergo the distribution process.

[edit] Channel decisions

Channel strategy Gravity Push and Pull strategy Product (or service)<>Cost<>Consumer location

[edit] Managerial concerns

The channel decision is very important. In theory at least, there is a form of trade-off: the cost of using intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order. Many suppliers seem to assume that once their product has been sold into the channel, into the beginning of the distribution chain, their job is finished. Yet that distribution chain is merely assuming a part of the supplier's responsibility; and, if they have any aspirations to be market-oriented, their job should really be extended to managing all the processes involved in that chain, until the product or service arrives with the end-user. This may involve a number of decisions on the part of the supplier: Channel membership Channel motivation Monitoring and managing channels

[edit] Channel membership

Intensive distribution - Where the majority of resellers stock the 'product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident. Selective distribution - This is the normal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product. Exclusive distribution - Only specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the 'product'.

[edit] Channel motivation

It is difficult enough to motivate direct employees to provide the necessary sales and

service support. Motivating the owners and employees of the independent organizations in a distribution chain requires even greater effort. There are many devices for achieving such motivation. Perhaps the most usual is `incentive': the supplier offers a better margin, to tempt the owners in the channel to push the product rather than its competitors; or a competition is offered to the distributors' sales personnel, so that they are tempted to push the product. Dent defines this incentive as a Channel Value Proposition or business case, with which the supplier sells the channel member on the commercial merits of doing business together. He describes this as selling business models not products.

[edit] Monitoring and managing channels

In much the same way that the organization's own sales and distribution activities need to be monitored and managed, so will those of the distribution chain. In practice, many organizations use a mix of different channels; in particular, they may complement a direct salesforce, calling on the larger accounts, with agents, covering the smaller customers and prospects.
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Means used to transfer merchandise from the manufacturer to the end user. An intermediary in the channel is called a middleman. Channels normally range from twolevel channels without intermediaries to five-level channels with three intermediaries. For example, a caterer who prepares food and sells it directly to the customer is in a two-level channel. A food manufacturer who sells to a restaurant supplier, who sells to individual restaurants, who then serve the customer, is in a four-level channel. Intermediaries in the channel of distribution are used to facilitate the delivery of the merchandise as well as to transfer title, payments, and information about the merchandise. For example, a manufacturer may rely upon the workforce employed by a distributor to sell the product, make deliveries, and collect payments. The channels used by a marketer are an integral part of the marketing plan and play a role in all strategic marketing decisions. See also channel competition; channel management; distribution.
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Myths of Sales Prospecting

Sales prospecting is a key activity for most sales driven small businesses. Take the time to revisit your assumptions about sales prospecting...the results will surprise you. For years, I dreaded the prospecting part of sales. The constant rejection was excruciating until I learned the myths toward sales prospecting. The 5 Myths of Sales Prospecting Myth #1: Prospecting is sales. This is the number one mistake made by small business owners and sales reps. Prospecting is a separate function from sales. Just as marketing is distinct from sales but closely linked. Prospecting is simply discarding all the unqualified leads and retaining the "gold". The job of prospecting is to find qualified leads that may buy your product. Only after this process is complete, should the selling begin. Myth #2: Prospecting is a numbers game. The old school of prospecting for business relies on contacting large numbers of cold

contacts. However, quality supersedes quantity. You must find prospects that have a propensity and possible motive to buy your product or services. I know of a large financial powerhouse, who provided sales reps with contact lists for mortgage and investments. The only problem was most prospects lived in a low income area and were highly unlikely to buy any financial product. Myth #3: Scripts are for kids. Many sales people insist on prospecting without any script. Scripting provides the framework of a successful prospecting campaign. It allows you to test what key benefits and qualifying questions work. The script must be personalized by the individual so the presentation does not sound "canned". Myth #4: Prospecting takes time. Prospecting takes only a few minutes to determine if the lead wants your benefits and can afford your company's product or service. Don't waste time on people unmotivated or unable to buy. Remember to focus on the "gold". Myth #5: Close them on the appointment. Far too many sales reps focus on setting the appointment. "Would Friday morning or afternoon, be better for you?" Next week only 20% of appointments show. What went wrong? Prospects will sometimes find it easier to agree to an appointment rather than saying they are not interested. If a prospect is remotely interested, then offer a much subtler approach...send them an information package. This allows you to build interest and turn the lead from warm to hot. Sales prospecting done right can have a huge impact on your sales revenue. It doesn't take an armor suit and great courage to deal with the fear of rejection during prospecting. Just keep an open mind to challenge the old school of sales and the myths of prospecting. Every time I hear the word "prospecting," I think of one of these crotchety old miners knee high in some icy mountain stream panning for hours in search of a few tiny flakes of pay dirt. Not a pretty picture, particularly when updated to reflect the efforts of many creative professionals today when it comes to prospecting for new business; hours on the phone looking for someone who needs a new logo or Web site overhaul. What could be chillier? Prospecting is anathema to most creative professionals and downright frightening for many. But the fact is, sometimes you have get out there and prospect, so you might as well do it right and get the unpleasantness out of the way quickly as possible. Here's the good news: prospecting is not selling. Really, it's not. In fact, one way to overcome an aversion to prospecting is to remind yourself that you're not trying to sell anybody anything. Prospecting is about two things: Qualifying potential clients. There's little use in trying to market your services to a company that truly can't afford you or doesn't need you (which is different from them thinking that they can't afford you or don't need you). So the first goal of prospecting is it separate the wheat from the chaff -- to find potential clients that are worthy of your future efforts. Prospecting done well will determine if you have a qualified lead. Focus on the "gold." Building relationships. Prospecting may eventually lead to a sale, but before you can even get there you have to build a relationship, and prospecting is the first step in doing so.

If you can achieve these two goals with a one or two phone calls, you're almost out of the prospector's river. Seven Steps of Successful Prospecting Create your list. Cold calls may work for time-share sales, but they have no place in the creative professional's marketing arsenal. Prospecting works best when you're making warm calls. These are calls to contacts with whom you have some connection -- any connection -- that will get you started in the conversation. There are plenty of sources for your warm list, including current clients, past clients, people you've met through networking opportunities, colleagues, vendors, that stack of business cards you've assembled, and yes, even relatives. Don't overlook the most important source: companies in your industry or region you'd like to work with and are undergoing a change -- a company that just purchased a subsidiary, hired a new VP of marketing, or is coming out with a new line of products. Look for this type of info in your local or trade press, the Internet, or through networking. As soon as you have that nugget of information consider the company a candidate for warm calling. Set your goals. Be clear about what the goal is for each particular call. It might be to set up a face-to-face meeting, to send literature, direct someone to your Web site, or simply to mine the name of a key decision maker. Know your goal before you call and you'll know how to score a success. Be persistent. Avoid leaving voice mail messages the first couple of times you call (though Caller ID is making this more difficult). It's doubtful that a person with buying authority will quickly return unsolicited sales calls. But if after a few attempts, you still can't reach them, then leave a voice mail message. Just make sure you've scripted a powerful message and keep it short. Script every call. Not preparing an informal script is perhaps the biggest mistake novice prospectors make. That's not to suggest that you'll need script the entire conversation, just the first few key statements. Though this may seem artificial, most successful salespeople use a script to ensure that they consistently have a strong impact. On the telephone you don't have time to make mistakes. Every word counts, so you've got to be prepared. Start with the piece of information that makes it a warm call. "I had lunch with Rajiv Patel yesterday, who mentioned that you..." , "I understand you've won a contract with Megacorporation X...", "I use your Web site as an example when I teach classes and I think I've got a few suggestions I'd like to pass on to you..." Now give your prospect some control. Follow with something like, "Do you have a moment to talk?" If they do, great, then keep chatting. If they don't, ask for a good time to call back and follow-up accordingly. Qualify, qualify, qualify. In some cases, the decision-maker is not necessarily the person who does the buying. The organization may have a separate purchasing department for that purpose. So ask the receptionist or anyone you speak with who the decision maker is. Once you've got the right person on the line, if the time is right, move into the qualifying phase. "What are your current needs in this area?", "If you could change anything about your present service provider what would it be?", "Is there anybody else besides yourself who might be involved in the decision-making

process?" Be brief. Keep prospecting calls brief and to the point. You'll have more in-depth conversations later. You might, however want to add a little something to enhance your legitimacy, such as "We've just finished a Web redesign for ABC Industries that resulted in a 25 percent jump in page visits." The more specific you can be in your case history, the more compelling your proposal will be. So, give actual numbers and percentages if possible. Ask questions and listen. In nervous desperation people often try to own the conversation. Try not to. The more talking the prospect does, the more successful the call. Ask the customer questions about his or her goals, challenges, and personal and business philosophies. How would you define success? What's the time frame? What problems have you encountered in the past? Get them talking. Learn to deal with rejection. Rejection happens. It's part of the package of prospecting. Be ready for it and -- as hard as it often is -- don't take it personally. See rejection as a necessary evil in the process and be ready to move on. Or think of it this way; a quick "no" is often better than uncertainty or delaying tactics that result in a "no" much later, after you've invested time and money in a proposal.