A channel is an organized network of agencies and institutions which, in combination, perform all the activities required to link producers with users to accomplish the marketing task. -(Bennett 1988).
This channel must be designed such that it delivers a level of value to the customer that creates a sustainable competitive advantage for the supply chain. It can take many forms depending upon the requirements of the customer. The relationship between the value of the product and the shopping experience is particularly important and the skill of the value chain is in the positioning of the total offer in a profitable way. Our study of channel management of shaving cream was limited to Greater Ghaziabad region. There are many competing brands of shaving creams in the market. * Gillete- P&G (Market Leader)
* Old Spice- P&G
* Vi John (Popular brand as it is the cheapest)
* Axe- HUL
* Dettol- Reckett Benkeiser
Our mode of study was to go to do a field visit and get in touch with all the members in the entire distribution channel. We visited all the members of the channel in P&G as it owned two of the most popular brands in the market, Gillete and Old Spice. CHANNEL LEVELS
The producer and the final customer are part of every channel. A zero level channel or a direct channel is one in which the product reaches the customers hand directly from the manufacturer. Shaving creams come under the FMCG sector and companies here usually follow four level channel where there is a manufacturer who manufactures the goods and sends it to the central warehouse in Rewari, Rajasthan. From there it is sent to the C&F agent in Dasna. From there it is sent to the distributor Surya Tradings near MohanNagar, Ghaziabad. On an average 4 trucks run two times a dayfrom the C&F agent to the distributor. From here they get it to the wholesalers who supply to the retail outlets and then it reaches to the customers. In case of organized retail e.g Big Bazaar, Reliance Fresh, Hypercity, Spencer, More three level channel is followed, where products go directly from the distributor to the outlets.
The number of intermediaries that a product has to go through before it reaches the final consumer. Usually P&G has to go through 4 intermediaries and the channel length is 4. CHANNEL BREADTH
The number of different entities that are involved for the same distribution function at different stages in a distribution channel. CHANNEL MANAGEMENT PRACTICES
The channel chosen affects all other marketing decisions. The company’s pricing depends on which channel it uses. In managing the intermediaries the firm must decide how much effort to devote to push and pull strategy. Push strategy uses the manufacturers sales force, trade promotion, money or other means to induce intermediaries to carry, promote and sell the product to users. Pull strategy, the manufacturer uses advertising, promotion and other forms of communication to persuade the consumers to demand the product from the intermediaries, thus inducing intermediaries to order it. Push strategy uses the resources of the company and they promote the products and with the help of pull strategy they persuade the consumers with advertisements, promotions, schemes so that the demand goes up and more demand is created in the market. Push strategy is generally used where there is low brand loyalty e.g toilet soap and pull strategy is used where there is high brand loyalty e.g shaving cream. Channels normally describe a forward movement of products from source to user, but there are reverse flow channels as well in case of shaving cream. The unused or expired products are taken back at the price it was given.
CHANNEL DESIGN DECISIONS:
The company/ marketer must understand clearly the requirements of the target customers. 1> Lot size: The number of units the channel...