SALES AND DISTRIBUTION MANAGEMENT
MBA Fall Semester Year 2
(July – December 2020)
Harjot Singh, LM TSM, TIET
12/23/2020
INTRODUCTION
TO
DISTRIBUTION
MANAGEMENT
2
A DEFINITION
• MANAGEMENT OF ALL ACTIVITIES
WHICH FACILITATE MOVEMENT AND
COORDINATION OF SUPPLY AND
DEMAND IN THE CREATION OF TIME
AND PLACE UTILITY IN GOODS
3
ANOTHER DEFINITION
• ART AND SCIENCE OF DETERMINING
REQUIREMENTS, ACQUIRING THEM,
DISTRIBUTING THEM, AND FINALLY
MAINTAINING THEM IN AN
OPERATIONALLY READY CONDITION
FOR THEIR LIVES
4
YET ANOTHER DEFINITION
• BROAD RANGE OF ACTIVITIES
CONCERNED WITH THE EFFICIENT
MOVEMENT OF FINISHED PRODUCTS
FROM THE END OF PRODUCTION LINE
TO THE CONSUMER
5
What is a Distribution
Channel?
6
WHAT IS A CHANNEL?
• AMERICAN MARKETING ASSOCIATION DESCRIBES
CHANNEL AS:
‘STRUCTURE OF INTRA-COMPANY ORGANIZATION
UNITS AND EXTRA-COMPANY AGENTS, DEALERS,
WHOLESALERS AND RETAILERS THROUGH WHICH A
PRODUCT OR SERVICE IS MARKETED’
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Distribution Channel…
Set
Set of
of interdependent
interdependent organizations
organizations
involved
involved inin the
the process
process ofof making
making aa
product
product or or service
service available
available for
for use
use or
or
consumption
consumption by by the
the consumer
consumer or or
business
business user.
user.
CLASSIFICATION OF CHANNELS
• SALES CHANNEL
• DELIVERY CHANNEL
• SERVICE CHANNEL
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NEED FOR DISTRIBUTION
• AVAILABILITY, CONVENIENCE, PROXIMITY
• ACCESS WITHIN AN ARM’S LENGTH
• VISIBILITY
• PHYSICAL MOVEMENT AND STORAGE
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HOW DISTRIBUTION ADDS VALUE?
• TIME, PLACE AND POSSESSION UTILITY
• ORDER TAKING
• ORDER COMMUNICATION
• ORDER PROCESSING
• DELIVERY OF GOODS
• COLLECTION OF PAYMENTS
• ASSOCIATED SERVICES
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DISCREPANCIES AND CHANNELS
(ALDERSON WROE,1954)
CHANNEL MEMBERS TAKE CARE OF 5 DISCREPANCIES:
• SPATIAL..REDUCE DISTANCE
• TEMPORAL..SPEEDS
• NEED TO BREAK BULK
• NEED TO PROVIDE ASSORTMENT
• FINANCIAL..FUND OR CREDIT
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MARKETING FLOWS IN CHANNELS
Physical Physical Physical
Possession Possession Possession
Ownership Ownership Ownership
Promotion Promotion Promotion
Negotiation Negotiation Negotiation Consumers
Producers Wholesalers Retailers Industrial
Financing Financing Financing and
Household
Risking Risking Risking
Ordering Ordering Ordering
Payment Payment Payment
Commercial Channel Subsystem
CHANNELS COULD INCLUDE:
• DEPOTS OWNED BY COMPANY
• DISTRIBUTORS, DEALERS, STOCKISTS
• INDEPENDENT WHOLESALERS
• INDEPENDENT RETAILERS
• TRANSPORTERS, WAREHOUSE OPERATORS
• C&F AGENTS
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C & F Agents
• As they are agents, they do not take title to the
product
• Generally provide warehousing, billing and logistics
facilities for a fixed rate per product billed
• Rate depends on the terms of agreement
• Could provide payment collection facility also at a
separate or included charges
sosoSource:quora.cour
OTHER KINDS OF CHANNEL PARTNERS
• CSA (Corporate Sales Associate)
• DSA (Direct Sales Associate)
• DMA (Direct Marketing Associate)
• Franchisee
• Agents and brokers
• Manufacturer representatives
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References
• Marketing Channels by Bert Rosenbloom, Cengage
Learning
• Basics of Distribution Management — A Logistical
approach by Satish K. Kapoor and Purva Kansal, PHI
Learning
• Distribution and Logistics Management — A Strategic
Marketing Approach by D K Agrawal, Macmillan
• Marketing Channels by Coughlan/Anderson/Stern/El-
Ansary, Pearson Education
• Google images
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SUGGESTIONS FOR TELECOM SERVICE PROVIDERS
• Telecom service providers need to put greater focus on pre-
paid consumers to prevent them from availing MNP and
churning.
• Telecom service providers need to focus more on the
functional dimension of service quality rather than the
technical dimension of service quality.
Thank You
• Service providers need to make greater efforts to retain
those customers who have been on the network for a longer
time and who have been contributing more to the top line
or bottom line.
