** Functions; reconcile the needs of producers and consumers, improving efficiency, improving accessibility and providing specialist services. * Consumer Channels; producer direct to consumer, producer to retailer to consumer, producer to wholesaler to retailer to consumer, producer to agent to distributor to wholesaler to retailer to consumer. * Industrial Channels; producer to industrial customers, producer to agent to industrial customer, producer to distributor to industrial customer, producer to agent to distributor to industrial customer.* Service Channels; service provider to consumer/ industrial customer, service provider to agent to consumer or industrial customer Determine channel strategy. * Making decisions concerning the selection of the most effective distribution channel, most appropriate level of distribution intensity and the correct degree of channel integration 3 components of channel strategy; channel selection, intensity and integration.
* Channel selection is influenced by;Market factors; buyer behaviour, ability to meet buyer needs, the willingness of channel intermediaries to market a product, the profit margins required by distributors and agents compared with the costs of direct distribution and the location and geographic concentration of customers Producer factors; lack of resources, the width and depth of the product mix offered by a producer, and the desired level of control of channel operations Product factors; complexity, perishability, extent of bulkiness and difficulty of handling Competitive factors; need to choose innovative channels because traditional channels are controlled by the competition or because a competitive advantage is likely to result. * Channel intensity.Intensive distribution; achieve saturated coverage of the market by using all available outlets, selective distribution, where a limited number of outlets in a geographical area are used Exclusive distribution; extreme form of selective distribution where only one wholesaler, retailer or industrial distributor is used in a geographical area * Channel integration can range from;Conventional marketing channels; separation of ownership between producer and distributor, although the manufacturer power of channel intermediaries may result in an administered vertical marketing system Franchising; legal contract between producers and channel intermediaries defines each party’s rights and obligations, leading to a contractual marketing system Channel ownership; where manufacturer takes control over distributor activities through ownership, leading to a corporate vertical marketing system 5 key channel management issues* Member selection involves identifying sources (trade, reseller enquires, customers of distributors and the field salesforce) and establishing selection criteria (market coverage, quality and size of the salesforce, reputation, financial standing, extent of competitive and complementary products, managerial competence, hunger for success and enthusiasm). * Motivation of distributors involves understanding the needs and problems of distributors, and methods include financial rewards, territorial exclusivity, providing resource support, the development of strong work relationships * Training may be provided where appropriate. Can provide the necessary technical knowledge about a supplier company and it products, and help to build a spirit of partnership and commitment * EVALUATION criteria include sales volume and value, profitability, level of stocks, quality and position of display, new accounts opened, selling and marketing capabilities, quality of service, market information feedback, willingness and ability to meet commitments, attitudes and personal capability.
* Conflict management T sources are differences in goals, differences in desired product lines, the use of multiple distribution channels by producers, and inadequacies in performance Cost-customers service trade-off in physical distribution.* Physical distribution management concern the balance between cost reduction and meeting customer service requirements. Components of a physical distribution system; customer service, order processing, inventory control, warehousing, transportation and material handling .* System should be managed so that its components combine to achieve overall objectives.
Management needs to answer a series of questions related to each component. Improve customer service standards in physical distribution.* Improving product availability, improving order cycle time, raising information levels and raising flexibility Ethical issues * Slotting allowances, grey markets, exclusive dealing, restrictions on supply and fair trading.
