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Service
After the sale service
Information/market feedback
Detailed information on consumer
reaction to certain attributes, acceptance
of the product
Tasks to be performed
An established brand name
Distribution in a large number of
convenient outlets
Good display in those outlets
An efficient means of restocking those
outlets What needs to be done to
get the product sold?
Who is to do each task?
How many firms of each
type does the manufacturer
want to have?
Issue of channel length
Manufacturer
Manufacturers’ representative
A “rep” is generally woks with the
manufacturer on a long term basis. The rep is
not an employee of the manufacturer but is
usually granted exclusive territorial rights and
paid on commission basis ( as percentage of
the manufacturer’s sales he or she generates).
The rep may sale noncompeting products. He What needs to be done to
or she does not take title to the goods and,
consequently, has very limited authority on get the product sold?
pricing and terms of sale.
Who is to do each task?
Merchant middlemen :
They buy and take title to the merchandise. How many firms of each
They then resell the merchandise under the type does the manufacturer
terms they desire, the manufacturer having want to have?
given up control of the product with the sale to
the merchant middleman.
The most common merchant middlemen are;
Wholesalers(sometimes called as
distributors), who resell to other merchants
(e.g. retailers) or industrial users
Retailers, who resell to consumers
Exclusive distribution
Selective distribution
Intensive distribution
Lot size:
Assortment :
Availability :
Logistics:
options channel paths product- segment-
function
Channel design
1 sales force framework
Identification of possible
channel paths
2 sales forces
3 sales force-distributor
option
Channel design
1 framework
Relative costs vs. Feasible
option
channel options
2
option
3
option
4
option
5
Fair dealing between manufacturers
and distribution channels –
manufacturer or distributor abusing its
power, taking unfair advantage of the
other partner
Incentive systems that encourage the
Ethical issues
channel members to engage in
unethical practices
Distributors persuading customers to
do things that are not in their best
interests
Not ensuring the provision of education
to ensure safe use of its products