Dist Channel

3946 Words Jul 30th, 2013 16 Pages
CONTENTS

* Concept * Types of channel distribution * Channel Design * Functions * Cost Allocation

* Advantages & Disadvantages

* Case Study

* Conclusion

Bucklin Theory of Distribution Channel Structure 1966

“A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a product and its title from production to consumption.” Our paper today focuses on the “appraisal of distribution channels, advertisement strategy.”

Meaning of Distribution Channel
We all know that a marketing mix consists of product, price, place and promotion. Distribution channels help in the ‘place’ aspect of the marketing mix. Distribution provides place, time
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Conventional distribution channel v/s vertical and horizontal distribution channel
A conventional distribution channel is a channel which consists of one or more independent producers, wholesalers and retailers, each a separate business seeking to maximize its own profits. It is the most common type of distribution channel. All producers, wholesalers and retailers must have a good coordination in order to have an effective distribution channel. Channel conflicts are very common leading to disruptions in distribution. Therefore, today we are moving towards developing integrated marketing systems which are the vertical or horizontal distribution channels.
A vertical distribution channel is one in which producers, wholesalers and retailers act as a unified system. One channel member owns the other, has contract with them or has so much power that they cooperate. The aim here is to achieve greater efficiency and economies of scale. Another aim is to eliminate channel-conflict arising out of disparate individual objectives.
The three types of VMS are – * Corporate VMS – It is the combination of successive stages of production and distribution under a single ownership – channel leadership is established through common ownership. * Contractual VMS- A vertical marketing system in which independent firms of different level of production and distribution joint together through contracts

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