classification of industrial and consumer good and channel of distribution
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This document discusses distribution channels and classification of industrial and consumer goods. It defines distribution channels as the route by which products move from producer to consumer, whether direct or indirect. Direct channels involve no middlemen, while indirect channels may involve retailers, wholesalers, or agents. Consumer goods are purchased for personal use and are classified as convenience goods, shopping goods, or specialty goods. Industrial goods are used to produce other goods and include raw materials, semi-finished goods, parts, and machinery.
classification of industrial and consumer good and channel of distribution
- 2. GROUP B •Rajpar (GL) •Ahsan Jaffry •Aashiq Hussain •Meeral Khan •Parasad Kumar
- 3. TOPIC: Distribution Channel And Classification of industrial consumer goods
- 4. 1. CHANNELS OF DISTRIBUTION Meaning of channel of distribution The channel of distribution is the route or the path taken by a product as it moves from producer to consumer. This channel or route, which connects the producer with the consumer in the transfer of ownership of a product may be direct or indirect.
- 5. • Important element of marketing mix • Influences sales volume and profits • Determines where and when the product will be available to users • Helps in reducing the effects of fluctuations in production
- 6. TYPES OF CHANNELS OF DISTRIBUTION Direct channel Indirect channel
- 7. TYPES OF CHANNELS OF DISTRIBUTION 1. Direct channel: No middlemen involved, In, direct channel the manufacturer or the producer supplies goods directly to the consumers.
- 8. METHODS OF DIRECT SELLING Door to door salespersons Retail outlets Catalogue Selling Telemarketing On Line Marketing or Internet marketing
- 9. TYPES OF CHANNELS OF DISTRIBUTION 2. Indirect channel: - Exclusive distribution channel, only one retailer sells the goods. - Marketing of goods first to retailer who in turn sell it to consumers is a favourite method with most of the manufacturer of consumer goods such as clothes, machines, automobiles etc.
- 11. 1) Manufacturer-consumer (Direct selling): • Shortest and simplest channel • No middleman between the producer and consumer • Producers sell directly to customers through door-to-door salesmen , direct mail , own retail stores, e.g.. BATA India Ltd. • Used generally for selling shoes , clothes , books, etc. • Very fast and economical • Expert services of middlemen are not available • Large investment is required 2) Manufacturer-retailer-consumer: • Manufacturer sells to one or more retailers who sell to consumers • This channel is popular when retailers are big and buy in large quantities ,e.g. departmental stores , super markets. • Generally used for distribution of consumer durables and products of high value like automobiles, home appliances,etc. • Relieves manufacturer of the burden of selling and provides control over distribution.
- 12. 3) Manufacturer-wholesaler-retailer-consumer: • Traditional or normal channel • Suitable where producers have limited finance and narrow product line • Channel used in case of consumer durables which are not subject to frequent changes in fashion. 4) Manufacturer-agent-retailer-consumer: • Used when retailers are few or geographically concentrated • Commonly used to sell agricultural products, machinery and equipment, etc. 5) Manufacturer-agent-wholesaler-retailer-consumer: • Longest channel • Producer hands over entire output to the agent who sales them to wholesalers • In case of cloth this channel is widely used • Results in wider distribution of products
- 13. CLASSIFICATION OF GOODS Consumer goods Industrial goods
- 14. CONSUMER GOODS Consumer goods: Consumer goods are those which are purchased by ultimate consumers from retail outlets for their own personal consumption.
- 15. 2. CLASSIFICATION OF CONSUMER GOODS Convenience goods: Goods which are frequently purchased by the consumers. The profit margin on convenience goods are low, i.e. Pepsi, Sugar, Soap, Cigarettes.
- 16. Shopping goods: Goods which have a relatively high unit value and are bought less frequently by the consumers. The buyers visits many stores and compare the prices, style, quality of goods, i.e. Furniture, Jewellery, Shoes, Clothes.
- 17. SPECIALTY GOODS: Goods which buyers have strong preference and make efforts to purchase. These are the high priced, i.e. Automobiles, Television etc..
- 18. 2) INDUSTRIAL GOODS: - Industrial goods are those which are used in the production of consumer or other type of goods for business use.
- 19. CLASSIFICATION OF INDUSTRIAL GOODS: Raw Material Semi finish good Parts Machinery and equipments
- 20. RAW MATERIAL These are the basic products which enter into the production process with little or no alterations. They may be marked to user customers or OEMs (Original Equipment Manufactures). Such as iron ore, crude oil, vegetables.
- 21. INDUSTRIAL GOODS Semi finish good Parts Machinery and equipments