Channel Management

Decisions:
 Selecting

 Training

 Motivating

 Evaluating

 Modifying

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 Channel Dynamics:
 Vertical Marketing Systems:
 Producers, Wholesalers, Retailers etc. acting as a
unified system
 Horizontal Marketing Systems
 Two or more unrelated companies come together to
exploit emerging marketing opportunity
 Eg: Banks & Car manufacturers’ tie-ups
 Multi
Channel Marketing Systems/Dual
Marketing
 Firms using two or more marketing channels to
reach its customers
 Eg: Sale of airline tickets online as well as through
agents 2
 Channel Conflict
 These conflicts arise because:
 Unclear areas of work/responsibility
 Mistrust
 To avoid conflicts:
 Encourage “Cooptation”
 Have Exclusive Dealing
 Have Exclusive Territories
 Tying agreements
 Clear contracts

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 Market Logistics:
 Planning, implementing & controlling the
physical flow of material & final goods from pt.
of origin to pt. of use.
 Major Market Logistics Decisions:
 Order Processing
 Real Time Replenishment
 Batch Method
 Warehousing
 Inventory Management
 Transportation
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Inventory Management Concepts
 Reorder Point: Based on order & demand
forecasts
 Order Lead Time: Period b/n the date when
order is placed & when raw material is
available for production
 Usage Rate: Ave. rate at which raw materials
are used for production
 Safety Stock: Stock maintained as a buffer for
unforeseen circumstances
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Economic Order Quantity:
 EOQ is that level of reordering the
inventory wherein the overall cost of
inventory management is minimized
 EOQ = √2C D/C
o h
 Where:
 D = Demand per unit time
 Co = Ordering cost
 Ch = Holding cost per unit time

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Warehousing:
 Warehouse: Place where goods are kept
for a limited time period
 Two Types of Warehouse:
 Storage Warehouse: Relatively long term
storage of inventory/raw material
 Distribution/Transit Warehouse: For
temporary storage during transit of inventory

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Functions of a Warehouse:
 Receiving

 Storing

 Packing

 Marking

 Shipping

 Documentation & Recording

 Stock Mixing
 Transloading/Cross Docking
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Wholesalers Vs. Retailers
 Wholesalers
 B2B Selling
 Large Transactions
 Visual Merchandising
is not important
 Location is important
keeping tax benefits,
other low costs in
mind
 At times, have to give
goods on credit to their
buyers
 Retailer oriented
promotion
 Retailers
 B2C Selling
 Small Transactions
 Visual Merchandising
is important
 Location is important
keeping customer’s
accessibility in mind
 Do not have to give
goods on credit
 Customer oriented
promotion
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