Services trying to find distribution channels. Sales of products. Sales channels in marketing. Which channel to choose

Sales channels for goods or products are understood as the chain of companies or individuals involved in their movement from producer to consumer. Channels are characterized by the number of links involved in the process, as well as how functions are distributed between them.

The chain itself consists of a manufacturer, intermediaries and an end consumer. Intermediaries are not agents or sellers. But they are a full-fledged link in the process. The channels themselves are a structure whose purpose is to sell products.

The main division involves two categories:

1. Direct. The manufacturer independently, without intermediaries, solves the problems of selling its products. For example, through a network of their own stores.
2. Indirect. A number of intermediaries are involved in the distribution process, that is, the chains can be long or short. Short ones are those highways where only one intermediary is involved. Long ones - more than one.

Indirect sales

Indirect types of sales channels are usually divided into:

1. Single level. It involves the participation of one intermediary in the process of selling goods. In industrial markets it is a broker or sales agent, in consumer markets it is.
2. Two-tier. There are two intermediaries between the producer and the consumer. In industrial markets it is a dealer and distributor, in consumer markets it is a wholesaler and retailer.
3. Three-level. In this case, the company's products go through three intermediaries. These can be: a seller of large bulk quantities, a seller of small wholesale quantities, and a retailer.

When a manufacturing company chooses the type of sales of products along the highway, it must be remembered that it must be optimal for a specific product, since all of the above have their own advantages and disadvantages.

Direct movement of goods has an extremely limited number of target markets, and also involves the accumulation of products in warehouses.

In addition, the manufacturer in this case will independently solve the problems of product support after the sale. This requires investment and resources.

An indirect or indirect distribution channel assumes a complete absence of contact between the producer and the consumer. But they significantly increase the number of target markets, master large-scale consumer audiences, increase sales volumes, thus increasing the manufacturer's profit.

Chain organization

The product distribution routes can be organized in different ways, therefore, distribution channels are managed using various mechanisms:

• Traditional classic scheme assumes a manufacturer, multiple wholesalers, and multiple retailers. Each individual link of the channel tries to get the maximum profit in its own interests, even to the detriment of the entire structure.
• Vertical marketing system... This scheme consists of a manufacturer and several intermediaries who act at the same time as a whole. There are subspecies of vertical marketing: corporate (production and distribution are in the same property), contractual (individual enterprises, on the basis of contracts, coordinate their actions, so that the system has the highest commercial results) and controlled (production and distribution are coordinated not by the owner, but by the most large-scale enterprise).
• Horizontal marketing system... Several separate enterprises create a single company for joint sales of products.
• Multi-channel marketing system... The manufacturer uses several different distribution options simultaneously and manages the channels independently.

The specificity of distribution channels is that once having made a choice, it will be extremely difficult for a manufacturer to change something.

Therefore, before making a choice in favor of a particular chain of implementation, it is necessary to analyze a number of factors:

• analysis of the profitability of a specific highway for goods;
• the level of correspondence of the channel to the target audience of consumers;
• the ability to control the movement of goods;
• the level of competition;
• share of the maximum possible profit;
• minimum costs of resources and money;
• estimated sales volumes;
• the possibility of expanding sales markets and attracting new customers.

Factors may be different, they depend on the specifics of the industry in which the manufacturer operates.

But the listed provisions play a significant role in the effectiveness of the selected product distribution scheme. The selection strategy is simple: the highway is selected, which, in terms of a combination of factors, is the most efficient.

Implementation channels

In modern Russia, indirect or indirect distribution channels are a pressing reality.

Even simply by virtue of the large-scale territory of the state, which is difficult to master alone. When choosing one or another channel, and there are many of them today, the following factors must be taken into account:

• the level of knowledge and skills in the movement of goods from producer to consumer, mastery of strategies for a particular market;
• the amount of knowledge about the conjuncture of a particular market where the sale of goods is expected;
• the availability of funds that are needed in the marketing of products;
• availability of the necessary resources (material base), which are necessary in the field of product sales.

The main functions of intermediaries in the distribution chain:

1. External logistics... A set of measures to ensure the availability of goods for the buyer.
2. External marketing... Collection of marketing information, in particular about the desires and needs of the target audience. Promotion of a product on the market through promotions, advertising and more. Working with the target audience to convince them of the necessity and importance of this product.
3. External service. A set of activities aimed at gaining reputation with a product, maintaining and increasing it.

Manufacturers choosing a distribution channel for their products (with the inclusion of intermediary organizations) need to understand one simple thing: to coordinate not on minimizing the costs associated with organizing and maintaining a specific sales channel, but on how consumers perceive this intermediary: trust, turn to, prefer his. Thus, the reputation of the intermediary plays an important role in the effectiveness of the distribution channel... This factor must be taken into account at the beginning of the creation of a product distribution chain.

I am sharing a selection of tools for attracting clients. The structure is based on the material of the book - "Traction" (by Gabriel Weinberg and Justin Mares).

The word "traction" has no exact translation into Russian. With regard to startups, this is the thrust, the dynamics with which key indicators change, plus the procedure for tracking these indicators. For example, a project may be unprofitable, but show good traction - abnormal audience growth or frequent customer retention, etc. Hence, terms such as "traction meeting", "traction card", etc. appeared.

1. Word of mouth and viral marketing
2. Media and PR / Public Relations / PR
3. Scandalous PR. Attention-grabbing events / Unconventional PR
4. Contextual Advertising / Search Enginge Marketing - SEM
5. Social networks and display advertising / Social and Dispay Ads, SMM
6. Outdoor Advertising / Offline Ads
7. Search Engine Optimization / SEO
8. Content Marketing
9. Email Marketing / Email Marketing
10. Development as marketing / Enegeneering as marketing
11. Targeting blogs
12. Partnerships, business development / Business Development
13. Direct Sales / Sales
14. Affiliate Programs and CPA Networks / Affilated Marketing
15. Existing Platform
16. Conferences and demo days / Trade Shows
17. Events / Offline events
18. Lectures, public speaking / Speaking Engagements
19. Community Building

Why is this cool? If you're starting a Business X, all you need to do is quickly test these 19 types of acquisition channels and choose the most effective one. If it was not possible to attract customers from any channel, the startup can be quickly closed and not tormented by the thought “what if there’s a super-marketer somewhere out there who can promote my product X”. You can also try to change the value proposition, target audience, and project team. In any case, we are dealing with a finite set of options that can be enumerated in a reasonable time and money.

By the way, if you find the 20th type of customer acquisition channel (different from these 19), write to me, I haven't found it yet.

It is worth saying that there are different methodologies for launching startups / new businesses. All of them, in one way or another, revolve around 3 terms that define the product “Target audience (A) - Value proposition (C) - Sales channel (K)”. Arkady Moreinis aptly named this combination AKM (audience-channel-message).

In most approaches, 2 of 3 terms are fixed and the third is sorted out. So what are the possible launch methodologies?

1. We fix the target audience (A), for example, mothers of 11th grade schoolchildren and the sales channel (K), for example, we will use only manual, direct sales, live. We go through the value proposition (C) until we find a successful combination so that the economy converges, there is a potential for scaling, etc. The second step is to sort out different sales channels (K), while fixing the target audience (A) and value proposition (C). This is the methodology used by most accelerators, for example, IIDF.
2. Another approach is to fix the target audience (A) value proposition (C), sort out the sales channels (C). This approach is used for projects that already have stable, repeatable sales, but have not yet learned to scale. These are the most interesting projects in terms of investments - they are already making money, and if they find a way to replicate themselves / a successful sales channel, a new venture story is possible.
3. The third approach: we fix a value proposition (C), for example, a service for translating audio into text and a sales channel (C), for example, facebook. We are trying to find the audience (A) with the maximum LTV (revenue from the client, during his use of the service) and the minimum CAC (acquisition cost). For an ordinary business, this is the worst approach, to create a product and then look for an audience for it. But if it's some kind of cool technology, like speech recognition or teleportation of people, then you can put technology or value proposition at the forefront. Most Israeli startups, for example, go this route.

What to put at the forefront? Audience (A), sales channel (C), or value proposition / technology (C)? My answer is to prioritize where exclusivity is possible.

In this retelling, I will mainly use approach # 2 - we fix the target audience and value proposition and go through the sales channels.

Key ideas for testing sales channels

The main idea is that over time, in any sales channel and in any advertising, CTR drops to 0% and the sales channel dies (the law of burning out sales channels). Therefore, you cannot stop - you must always look for new channels. When banners appeared, their CTR reached 75% (!) Now the norm is about 0.1-1%.

In a competitive environment, the cost of attracting buyers grows, and the marginality tends to zero. The paradox is that if in a regular business you are given volume discounts (when buying a batch of 100 computers, each will cost less than buying one), then in advertising you have to pay a margin for volume (the cost of attracting 1000 customers in terms of one, much higher than the cost of acquiring 10 customers).

Studies have shown that very few businesses die due to product shortages, almost all die due to lack of customers and lack of sales channels. And even for those who survive, a maximum of 1-2 channels work effectively (Pareto's law in the most severe form). That is, the goal of testing sales channels is to try 19 types and 100 ways to find at least one (!) That is more effective than all existing ones, or where the economy will converge and focus on it. Or make sure that nothing more effective exists yet. Worst of all, different channels may work at each stage of development. They usually start with “manual” or direct sales and then go further, for example, into display advertising, which quickly “burns out” after which contextual advertising starts working well, then partner networks, SEO, etc.

This is where the “50/50” rule of thumb emerges - the founder should spend 50% of his time on creating a product and 50% on attracting customers and developing sales channels.

The main metrics by which the effectiveness of channels is ranked:

• For how much you can buy a client (CAC - customer aquisition costs, the cost of attracting a buyer), for example, their context in yandex - 5 thousand rubles, and from facebook - 3 thousand rubles.
• How many clients are in the channel (capacity) - for example, from the context - 100 clients per month, and from facebook - a maximum of 10, while from the context it is more expensive.
• How difficult is it to connect - for example, facebook starts in 1 minute and without moderation, in yandex you can go through moderation for 2 days, it will take more than a month to connect an affiliate network, and SEO from 3 months.
• ROI - return on investment over time. This is the most accurate and generalizing indicator, but also the most difficult to calculate, usually it is counted by cohorts. Here's the puzzle:
  1. Week number 1. They invested in Yandex and Google 1 thousand rubles each. We got 5 leads from Yandex (for example, email registrations), from Google - 10 leads. Let's call a group of these leads - "cohort No. 1"
  2. Week number 2. From Yandex - out of 5 leads, 2 buyers turned out, who bought for the amount of 1 thousand rubles. From Google - out of 10 leads, there were 5 buyers who bought for 500 rubles. What ROI will be for the 2nd week, which channel is more effective?
  3. Week number 3. One of those 2 buyers from yandex came back and bought another 1000 rubles. Two of those 5 google buyers came back and bought another 2000 rubles. What is the ROI for the 3rd week? Which channel is more efficient? Write your answers in the comments below.

Now, a couple of phrases about each type of sales channel.

For clarity, I'll take an example with a hostel. Let's say I have a hostel with 20 beds in Krasnodar and I need to “spin it up from scratch” and achieve at least 50% loading by guests. Naturally, I will look at the analogs and see what the main attraction channels are, for example, booking, avito, sutochno and advertising on the asphalt near the nearest station. And of course, my attempts may fail if the product itself is not of high quality (inadequate prices, bad reviews, no chips), or the market is oversaturated, or the team is inadequate - there can be many reasons. By the way, all these problems will quickly surface during testing.

What is the purpose of all these tests? Find such a combination "target audience - value proposition - sales channel", in which CAC and other costs are minimal, and LTV is the maximum per customer, while ensuring loading\u003e 50%.

So let's go through the list.

Channel # 1 Word of mouth and Viral Marketing

The essence is simple - 1 attracted user brings at least 1 new one. The most natural and ancient way. But there are several nuances:

• The basis of viral distribution and word of mouth at all times and in all niches is a quality product that in a useful way stands out significantly from other products in the perception of the consumer. The product causes a "wow-effect" or at least is remembered, so people start talking about it and recommending it to their friends online or offline. You can stand out either by doing something 2-10 times better (for price, speed, level of service, etc.), or by being the first in a certain category ("the first self-driving car"), or by creating non-standard combinations (for example, "Books in pharmacies"). See about marketing laws.
• In order to achieve virality, the product must initially be designed for this. For example, so that the value from the product appears only when there are other people there. Viber, Messengers, etc.
• For virality / viral distribution to occur, the product must enter an existing community with good communication. Zinga grew on Facebook, Skype and Groupon on email lists, Viber on friends' phonebooks, paypal on eBay.
• The formulas and laws of virality can be viewed
• How to design products for viral spread

On my own, virality is practically the only channel for cheap products with a check up to $ 10 - this includes: music, books, most mobs. applications, etc. Where does this come from? Quite simply, all viable businesses must meet two simple conditions:

1. CAC< 1/3 LTV — стоимость привлечения покупателя должна быть не больше 1/3 выручки, генерируемой этим покупателем за время жизни (для упрощения можно взять за 1 год). Коэффициент 1/3 получен эмпирически, для России я бы брал 1/10.
2. ROI by CAC\u003e 100% in 6 months. Investments in attracting buyers should be fought back at least six months, for Russia I would take 1 month.

So, if our check is $ 10, then we can buy a customer for no more than $ 3, and this immediately blocks most of the available sales channels with a large capacity for us. All that remains is virality and media publications, which are ultimately aimed at creating an initial critical mass of users. And without virality, everything quickly fades away. The second option is to work locally. It makes no sense to sell cheap things online (see the reasons above), but they sell quite well offline, in retail outlets with high traffic. Our hostel is just this case - with a check of about 500 rubles. per day. But no one is stopping us from raising the average check, ARPPU and LTV, right?

A couple of ideas for promoting the hostel on word of mouth:

• We make a hostel in the style of “a shelter for those who were kicked out of the house by their wife”. It is interesting to talk about this, it usually happens regularly, most likely it will bring friends in misfortune.
• We are making a hostel in the style of a "hostel" with initiation into students - for graduates of KubSU (where I started to study at the Physics and Technology Institute, before I transferred to MEPhI) who want to experience nostalgia.
• Perhaps the best audience will be business travelers who rent hostels and buy checks for expensive hotels in order to earn extra money. Those who are reimbursed by the company. For them, you can make a "business hostel" with photomurals of New York lights or a minimalist white office version.

Channel # 2 Media and PR / Public Relations / PR

infographics from IAB Russia for 2015

There is a fundamental difference between online and offline publications. There is no limit to the number of pages / space on the blog - so when you write there, you are doing a favor to the blog author (new content adds traffic). The print media has a limited number of pages, so when they write, they do you a favor.

How does the media work?

One of the clever tactics for getting into the media is this:

1. We write the story ourselves on a free resource like Habr or Medium
2. Next, we share the story in the social. networks. We get a maximum of likes / reposts, etc.
3. Then we add some paid advertising (promo posts on facebook) - for additional. advancing
4. Then we write to journalists and opinion leaders that the news is cool and attracted so many things. They fumble it with their audience

The media is very useful, especially if you are going to raise investments. Press attention - add. confirmation that the project is in demand. Although, if they actively write about the project in the media, for me this is a direct signal that the founders are running out of money and they are actively looking for the next investors. The press does not write about profitable projects that are doing well.

A couple of ideas for promoting the hostel through the media:

• Start a blog in which to chronicle events: how they chose the premises, how they did the repairs, etc.
• Describe the scandal in the style of "how our hostel almost became a brothel" and lead to the idea that now everyone who wants to live undergoes mandatory registration with passports, etc.

Channel # 3. Scandalous PR. Attention-grabbing events / Unconventional PR

This is a continuation of the previous paragraph, but is highlighted in a separate category. Examples of such non-standard events:

• ice cream for all Uber customers.
• elon Musk's speech with the presentation of the Tesla battery, when the whole building was powered by their own batteries.
• a piece of ice with the words "PayPal - Freezes Your Money" at the entrance to the conference.
• something special for customers. Handwritten letters and gifts from the founders.
• groupon's subsidized shares for Strubucks. When they bought certificates for 300 rubles. and sold to subscribers for 50 rubles. (subsidized 250 rubles for each certificate). At the same time, we received both PR and buyers, and cheaper than through conventional channels.

A couple of ideas for promoting the hostel through non-standard events:

• Host a free master class on washing sheets, assembling furniture, and painting walls at the hostel. The method that Tom Sawyer used to paint the fence.
• A room with a "demobilization train" as in the DMB movie or arrange a "student initiation"

Channel # 4. Contextual Advertising / Search Engine Marketing - SEM

Why is context good? People realized the need and even formulated it. They made a tremendous effort to type this query into the search bar. Small businesses spend over $ 100M (!) On Google Adwords every day. Key points to keep in mind when creating contextual advertising:

1. In contextual advertising, you need to strictly separate search campaigns from companies from partner networks. Google has KMC (Display Network) and Yandex - YAN (Yandex Advertising Network).
2. Contextual advertising from search (Google, Yandex) is generally more effective (has a higher ROI) than teaser and targeted advertising (Facebook, VK, Mail) or advertising in the media networks of the KMC, YAN due to the fact that people in search have already realized the need for “warm and hot traffic ", and in the media, teaser advertising needs are unconsciously" cold traffic "
3. Competent targeting (accurate hitting the audience) is more important than the essence of the ad.
4. In advertising with a picture, 80% of the effect is given by the picture and 20% by the text of the message.
5. To get traffic a) a lot b) cheap - the only way is to create a large number of advertisements for low frequency queries. For example, you create a core of 10 thousand low-frequency queries, where each word is searched 1-2 times a month (!) With practically zero competition and a high CTR, you get 10 thousand relatively inexpensive targeted conversions. The most difficult thing is to put together such a large core and create 10 thousand advertising campaigns. For this, there are automation tools like k50.ru
6. An ad classic, the AIDA model - which is still effective:
   • Attention - attention
   • Interest / Offer - a catchy value proposition
   • Deadline is a time limit. Why is it needed today, urgently.
   • Action / Call to action - call to action "click"
7. Position \u003d Rate * CTR * Quality Score (Behavioral Factors)
8. Budget \u003d clicks * cost per click
9. The first 2 ads in SERP take 80% of targeted traffic (!)
10. The syntax is important (!, "", +, Negative words,)
11. The main rule. 1 request \u003d 1 declaration (unambiguous utm markup). Do not try to fit multiple requests into one ad. It will be impossible to understand the effect.
12. The main mistakes when creating search queries:
    • 1 ad - many searches
    • No ODC, AIDA in ad
    • No specifics - there must be numbers, addresses, prices,!
    • There is no separation of ads into "Search" and CCM
    • No separation of ads by geography
    • Quick links, addresses, reviews are not used in the ad

A couple of ideas for promoting a hostel through context:

• Obviously, with our low check, we will not be able to use expensive high-frequency queries like “hostel in Krasnodar” (CPA will be too high), but we can focus on the “long tail” of low-frequency queries like “hostel in Krasnodar for business travelers with checks”. Naturally, if we want to get enough traffic, we will have to make a large number of low-frequency requests + narrow the geography.
• Perhaps the easiest way for us will be to use only retargeting in YAN / KMS for those who came to us from other channels, for example, from blog articles.

The continuation in the form of a text has not yet been completed, but it is in the form of a webinar.

How to test 19 types of sales channels in 21 days? Course announcement

The description of the remaining sales channels (from 5 to 19) will be sent to blog subscribers by email a little later, you can subscribe in the blog on the right. Plus watch the webinar recording about 20 types of sales channels

For those who want to go through and try all sales channels in practice in 21 days - join my

Since the main task of a trading and intermediary firm is to sell products, it is natural that the performance of such an enterprise largely depends on the effectiveness of its sales system. At the same time, the important points are the costs of creating and operating a sales system, the versatility and uniqueness of the sales system, and its effectiveness in certain conditions.

The sales system of an enterprise can be built in various ways. Distribution system classification:

Traditional distribution system - consists of an independent manufacturer, one or more wholesalers and one or more retailers. All participants in the system are independent and not under the control of others; they pursue the goal of maximizing profits only in their own area of \u200b\u200bthe sales system.

Vertical distribution system - acts as a single system, includes a manufacturer, one or more wholesalers and retailers pursuing common goals. As a rule, one of the participants takes the leading role. Vertical systems can be corporate, contractual, or administrative.

A horizontal marketing system is the unification of two or more firms in the joint development of emerging marketing opportunities in a specific market.

The main types of sales and distribution activities:

Direct sales - establishing direct contacts with buyers (usually used when selling capital goods).

Indirect marketing is the sale of goods through trade organizations. Manufacturer independent (for consumer goods).

Intensive sales - connecting to the sales system of all possible resellers (for consumer goods, branded goods).

Selective (selective) sales - provides for limiting the number of resellers depending on the nature of the clientele, service capabilities, staff training level, etc. (used for goods requiring special maintenance, as well as for expensive prestigious goods).

Targeted sales - aimed at a specific group of buyers (market segment).

Non-targeted sales - Marketing activities are targeted to all customer groups.

To achieve commercial success when using one or another type of sales and distribution activities, you need to carefully analyze all financial issues, to make a comparative characteristic of costs and benefits.

When forming a sales system for a certain product, a trading and intermediary firm has to take into account many factors, the main of which are:

Features of end consumers - their number, concentration, the size of the average one-time purchase. The level of income, the pattern of behavior when buying goods, the required working hours of the seller, the services of sales personnel, etc.

The capabilities of the enterprise itself are its financial position, competitiveness, the main directions of the market strategy, the scale of production.

Product characteristics - type, average price, seasonality of production and demand, storage and transportation requirements.

The level of competition and the marketing policy of competitors - the number and concentration of competitors, their marketing strategy and tactics, relationships in the sales system.

Characteristics and characteristics of the sales market - actual and potential capacity, customs and trade practices, density of distribution of buyers, average income of buyers.

Comparative cost of different distribution systems.

The development of a sales policy is preceded by an analysis of the effectiveness of the existing sales system as a whole, as well as by its individual elements, the compliance of the sales policy pursued by the company with specific market conditions. The analysis is carried out not so much by the quantitative volumes of sales by product, but also by region, as by the whole complex of factors influencing the size of sales: the organization of the sales network, the effectiveness of advertising and other means of sales promotion, the correct choice of the market, the time and methods of entering the market.

Analysis of the sales system involves identifying the effectiveness of each element of this system, assessing the activities of the sales apparatus.

The rationale for the effectiveness of the sales policy is a multivariate calculation of distribution costs and the selection, on its basis, of the optimal option for the main areas of sales activities in the target market or its segment.

An important part of product marketing management is the selection of product distribution channels. This is a complex management decision affecting all other marketing decisions.

Sales of products in most cases are carried out through intermediaries. Intermediaries, thanks to their contacts, experience and specialization, allow to ensure wide availability of goods and bring them to target markets.

With the help of intermediaries, it is possible to reduce the number of direct contacts between manufacturers and consumers of products. Supply and sales organizations, large wholesale depots, stock exchange structures, trading houses and shops can act as intermediaries.

Distribution channels can be of three types: direct, indirect and mixed.

Direct channels are associated with the movement of goods and services without the participation of intermediary organizations. They are most often set between manufacturers and consumers who control their marketing program themselves and have limited target markets.

Indirect channels involve the movement of goods and services, first from the manufacturer to an unknown intermediary participant, and then from him to the consumer. Such channels usually attract enterprises and firms that, in order to increase their markets and sales volumes, agree to give up many sales functions and costs and, accordingly, a certain share of control over sales, and are also willing to somewhat weaken contacts with consumers.

Mixed channels combine the features of the first two distribution channels.

The choice of channels and methods of marketing in the market depends almost entirely on the nature of the product. The mechanism for making decisions about distribution channels is based on the economic and technological feasibility of moving goods along such a path so as to bring benefits to the manufacturer, intermediaries and the end consumer. If any element of the chain does not receive the calculated benefit, the distribution channel will be ineffective.

Sales channels often develop spontaneously. For example, there were several wholesalers with whom the company worked for more than one year, and over time, connections either strengthened, or a search for new partners begins.

For "spontaneously" emerging channels, it is usually characteristic that the manufacturer does not control the prices for the resale of goods by intermediaries, the quality and quantity of the customer base of wholesalers, the timeliness of customer service support by intermediaries. All this leads to unmanageability and impossibility of planning sales by channel.

How to reverse this situation and choose the channels that will “deliver” the product to the target consumer segments at the lowest cost? To answer this question, you can use a well-proven comprehensive assessment of distribution channels. The purpose of using this technique is to develop sales planning for sales channels not based on intuition or "from what has been achieved", but on the basis of complete information about the prospects of a particular channel.

It is necessary to start working with distribution channels after the market orientation of the company has been determined, i.e. the main target groups of clients, the strategy of development and behavior in the market are determined, after which the channels are assessed. The most commonly used criteria are:

• 1. Profitability of channels.
• 2. The degree of their compliance with consumer requirements.
• 3. Controllability, i.e. the possibility of further control over the movement of goods and prices.
• 4. The level of competition for the ability to work with the channel.
• 5. Perspective of channels in terms of long-term trends.

For each of the criteria, it is necessary to determine a scoring system that would reflect how the criteria are expressed. In our practice, a 10-point assessment scale is usually used: 1 point - the criterion is minimal, 10 points - the criterion is most pronounced.

The following indicators are generally subjected to technical and economic analysis:

• - determination of the number of possible intermediaries, based on the selling price (with and without discounts), the prevailing market price and the likely trade margins that each channel participant will make;
• - elections of the type of intermediaries on legal and economic grounds and according to the volume of goods that they are able to purchase;
• - according to what control scheme to organize the work of its own channel (functional-linear, divisional or matrix);
• - determination of the principles of mutual settlements between the manufacturer and intermediaries;
• - assessment of the variability of distribution logistics:
  • a) warehouse: on the territory of the enterprise or closer to the consumer;
  • b) transport: own or rented

The criteria by which you can make a decision on the sales structure of the selling enterprise are presented in Table 1.

The prospects of channels need to be assessed in terms of long-term trends. Due to the rapid development of markets in Kazakhstan, the structure of distribution channels is changing significantly.

According to experts, specialization of the wholesale link in the distribution chain will take place in the near future: logistics companies and specialized wholesalers will have a greater advantage. The traditional wholesaler group is shrinking.

Table 1 Criteria for choosing a sales channel

Considered characteristics		Indirect channel	Comments
short
Buyer characteristics
Numerous				the principle of reducing the number of contacts plays an important role
High concentration				low costs per contact
Large purchases				contacting costs are quickly amortized
Irregular shopping				increased costs for frequent and small orders
Prompt delivery				stock availability near the point of sale
Product characteristics
Consumable Products				need for fast delivery
Large volumes				minimization of transport operations
Technically uncomplicated				low maintenance requirements
Non-standardized				the product must be tailored to specific needs
New goods				careful "tracking" of the new product is necessary
High value				the cost of establishing a contract is quickly amortized
Company characteristics
Limited financial resources				costs are proportional to sales
Complete assortment				the company can offer full service
Good control is desirable				minimizing the number of screens between the firm and its market
Widely known				good reception from the sales system
Wide coverage				sales must be intensive

At the same time, the share of organized retail in retail sales is growing. Retail chains are a promising channel in terms of long-term trends. Current trends in the development of distribution channels are monitored and published regularly.

When forming a product distribution channel, the first place is given to the decision on the channel structure, i.e. the number of channel levels and the specific composition of the channel members. When identifying possible options for distribution channels, it is necessary to determine the type of intermediaries used. The classification of intermediaries can be carried out according to a combination of two characteristics: on whose behalf the intermediary works and at whose expense the intermediary conducts its operations.

Table 2 Types of intermediaries in distribution channels

Dealers are wholesale (less often retail) intermediaries who conduct transactions on their own behalf and at their own expense. The goods are purchased by them under a delivery contract. Thus, the dealer becomes the owner of the product after full payment for the delivery. The relationship between the manufacturer and the dealer ends after all the conditions under the supply agreement have been fulfilled.

There are two types of dealers. Exclusive dealers are the only representative of the manufacturer in the region and are vested with exclusive rights to sell its products. Dealers cooperating with the manufacturer on a franchise basis are called authorized dealers.

Distributors are wholesale or retail intermediaries who transact on behalf of the manufacturer and at their own expense. As a rule, the manufacturer grants the distributor the right to sell their products in a certain territory and for a certain period. Thus, the distributor does not own the product. Under the contract, they acquire the right to sell products. The distributor can act on his own behalf.

Commission agents are wholesale or retail intermediaries who transact on their own behalf and at the expense of the manufacturer. The agent is not the owner of the products sold. The manufacturer remains the owner of the product until it is handed over and paid by the end consumer. The contract for the supply of products is concluded on behalf of the agent. Thus, the commission agent is an intermediary only for the committent, and not for the end consumer, whose money is transferred to the account of the commission agent.

Agents are intermediaries who act as a representative or assistant to another person (principal) who is main in relation to him. Typically, agents are legal entities. The agent enters into transactions on behalf of and at the expense of the principal. Universal agents perform any legal action on behalf of the principal. General agents only conclude transactions specified in the power of attorney.

Brokers are intermediaries in the conclusion of transactions, bringing together counterparties. Brokers do not own the products like dealers or distributors, and do not dispose of the products like distributors, commissioners or agents. Unlike agents, brokers do not have a contractual relationship with any of the parties to the transaction and act only on the basis of separate orders.

Each manufacturer, on the basis of marketing research of the sales markets for its products, determines the structure of possible distribution channels, their relationship with specific categories of consumers and with each other.

After choosing the types of intermediaries in the distribution channel, you need to determine the number of these intermediaries. Marketing has developed three approaches to solving this problem: intensive distribution, exclusive distribution, and selective distribution. Intensive distribution involves the provision of stocks of products in the largest possible number of trade enterprises. Exclusive distribution implies a deliberately limited number of resellers who trade a given product within distribution territories. Selective allocation is a cross between intensive and exclusive allocation methods.

Although sales are the final stage of a commodity producer's economic activity, in market conditions, sales planning precedes the production stage and consists in studying the market conditions and the enterprise's capabilities to produce products in demand, as well as in drawing up sales plans, on the basis of which supply and production plans should be formed. A well-built system of organization and sales control is able to ensure the company's competitiveness. Given the above, it is recommended to determine a sufficient amount of information for the firm and its divisions so that they can make informed decisions in the field of sales management.

Despite the fact that there are only two main classification features (the basis of the organization of the system and the number of intermediaries), the relationship between the manufacturer, resellers and end users can take many types and forms. The most active role in these relations belongs to the manufacturing company, which, when choosing a sales system, first of all takes into account the risk factor of commodity movement, and also estimates sales costs and profits. Consider the variety of sales types based on different criteria.

I By the number of channel levels:

There are two main types of distribution channels - direct and indirect.

Direct channels of commodity movement (zero-level channel) are associated with the movement of goods and services from producer to consumer without the use of independent intermediaries. They are most often used by businesses that want to control their marketing program, seek close contact with consumers and have limited target markets. There are three main ways of direct selling - peddling, mail order and manufacturer-owned stores.

Indirect channels of commodity circulation are associated with the movement of goods and services from the manufacturer to an independent participant in the distribution of goods, and then to the consumer. They usually attract firms that, in order to increase their markets and sales volume, agree to give up many sales functions and costs and, accordingly, a certain share of control over distribution channels and contacts with consumers.

Indirect distribution channels can be characterized by the number of their constituent levels. The distribution channel level is any intermediary who does the job of bringing the product and ownership of it closer to the end customer. The length of the channel is indicated by the number of intermediate levels present in it.

A sibling channel includes one reseller - a retailer or distribution agent.

The duplex channel includes two intermediaries. In consumer markets, wholesalers and retailers become such intermediaries.

The three-tiered channel includes three middlemen, with a small wholesaler usually standing between the wholesaler and the retailer.

When organizing an indirect distribution channel, there is a need to determine its length and width. The channel length is the number of channel levels, and the channel width is the number of intermediaries that are conventionally at the same level.

Due to the fact that indirect channels include independent participants, the company develops a general marketing plan and distribution of responsibilities, which are stipulated in contracts (delivery times, commissions, terms of payment, advertising support, discounts on the size of supplies, labeling).

II By the number of intermediaries (market coverage strategies):

There are three levels of channel intensity (three market reach strategies):

Intensive distribution. Manufacturers strive to ensure the availability of their goods, as a rule, of everyday demand, in the largest possible number of outlets. Convenience of location and place of purchase is mandatory for these products.

Exclusive distribution. In this case, the number of intermediaries is strictly limited. At the same time, exclusive distribution agreements are concluded, according to which the sellers undertake not to trade in the goods of competing brands. Exclusive distribution is found in the practice of trade in new cars, some large electrical appliances, etc. By granting exclusive rights to the distribution of its goods, the manufacturer hopes to organize more aggressive and skillful sales, as well as the possibility of more complete control over the activities of sellers in the field of price policy, incentives , the provision of services and the level of service. This distribution usually enhances the image of the product and allows for higher markups on it.

Selective (sample) distribution is a cross between intensive and exclusive distribution. In this case, the number of involved intermediaries is less than the total number who are ready to engage in the sale of goods. Selective distribution gives the manufacturer the ability to achieve the necessary market coverage with tighter control and at lower costs on his part than organizing intensive distribution.

By the nature of the interaction of participants within the channel:

Manufacturers can use multiple distribution channels simultaneously to reach different target markets.

From an organizational point of view, the following main types of sales marketing systems are distinguished:

The traditional marketing system consists of an independent manufacturer, one or more wholesalers and retailers. Each channel member is an independent enterprise seeking to maximize its profit, even to the detriment of the entire distribution system as a whole. None of the channel members have control over the activities of the other members, the goods are transferred from link to link, as a rule, with the loss of ownership.

In the process of development of marketing structures, their adaptation to changes in the internal and external environment, and, especially, under the influence of competition, vertical marketing systems appeared.

The vertical marketing system (VMS), on the other hand, consists of participants acting as a whole, pursuing common goals and interests. In this case, one of the channel members either owns the others, or grants them the right to franchise, or has the power to ensure their full cooperation, while retaining ownership of the product.

The emergence of the IUD is associated with the attempts of stronger participants to control the behavior of the channel and to prevent conflicts between its individual members. Navies are economical in terms of their size, have great bargaining power, and avoid duplication of effort. The Navy has become the predominant form of distribution in consumer marketing, where it already covers up to 80% of the total market.

There are three main types of IUDs:

1. Corporate Naval Forces. All successive stages of production and distribution are under a single ownership and have a high degree of control over the distribution channels. For example, in the Sears department store chain, about 50% of all products sold are manufactured by companies that the corporation itself owns in part or in full.

2. Controlled IUDs coordinate a series of successive stages of production and distribution due to the size and power of one of its members, which seeks cooperation and support from resellers. Thus, the corporations "General Electric", "Procter & Gamble" are able to achieve close cooperation with intermediate sellers of their goods in organizing expositions, allocating retail space, implementing incentive measures and shaping prices.

3. Contractual Naval Forces are made up of contracted independent firms that perform different production and distribution tasks and join forces to jointly achieve maximum commercial results. Treaty naval forces have recently become widespread.

There are three types of contractual IUDs:

Voluntary retail chains sponsored by wholesalers. Wholesalers are forming a voluntary alliance of independent retailers to help them compete against large chain stores.

Retailer cooperatives. Retailers are creating a new independent association that will deal with wholesale operations and possibly production. Members of the association make their purchases through the cooperative and jointly plan advertising activities. The profit received is distributed among the members of the cooperative in proportion to the volume of purchases made by them.

Franchising (organizations of privilege holders). Franchise - the right to carry out a certain type of economic activity using a usually well-known trademark, in accordance with predetermined rules and regulations.

In recent years, it is this direction in retail trade that has been developing at the fastest pace.

Three forms of privilege can be distinguished:

franchises giving the right to privileges to retailers under the auspices of the manufacturer. For example, Ford grants licenses to trade its vehicles to independent dealers who agree to adhere to certain terms of sale and service.

franchises for wholesalers-holders of privileges under the auspices of the manufacturer. For example, Coca-Cola issues licenses to trade in different markets to bottling plant owners (wholesalers) who buy beverage concentrate from it, carbonate it, bottle it and sell it to local retailers.

franchises to retailers under the auspices of a service firm. In this case, the service firm forms an integrated system, the purpose of which is to bring the service to consumers in the most efficient way. For example McDonald's.

A horizontal marketing system (HMS) consists of two or more firms joining forces in the joint development of emerging marketing opportunities. An individual firm either does not have enough capital, production capacity to act alone, or it sees considerable benefits for itself in the association. Firms can cooperate on a temporary or permanent basis, or they can create a separate joint company. For example, Dr. Pepper lacked the capacity to bottling its soft drink and decided to engage on a licensed basis the bottling companies that worked with Coca-Cola.

Multichannel marketing systems consist in the organization of a trade by one firm and through its own sales network and through independent intermediaries. For example, General Electric Corporation sells large electrical appliances both through independent dealers and directly to large residential contractors. Firms can benefit from increasing the number of distribution channels in three ways: by increasing market reach, lowering the cost of selling to a specific group of buyers, the added channel can accommodate unfulfilled customer requests.

Thus, the choice of distribution channels is carried out on the basis of economic criteria - comparing the volume of sales with the costs of creating and operating the channel, in terms of the ability to control the activities of the distribution channel and adapt it for the sale of new products or work under new conditions.

The sales policy of a manufacturer of products should be considered as a purposeful activity, principles and methods, the implementation of which is designed to organize the movement of the flow of goods to the end consumer. The main task is to create conditions for transforming the needs of a potential buyer into real demand for a specific product. These conditions include elements of sales policy, distribution capitals (sales, distribution of goods) together with the functions they are endowed with.

Marketing: lecture notes Loginova Elena Yurievna

4. Methods of distribution channels

4. Methods of distribution channels

Any company independently chooses the system and methods of sales.

There are three main marketing methods:

1) direct - the manufacturer works with the end consumer without the services of intermediaries;

2) indirect - in the process of product distribution, the manufacturer uses independent intermediaries;

3) combined - organizations with mixed capital, including the capital of the manufacturing firm itself, are used as intermediaries.

An important issue of the company when organizing product distribution is the issue of choosing the most effective system of product movement. In doing so, it is necessary to decide whether to engage in direct sales or through intermediaries.

As practice shows, direct sales are beneficial if:

1) the volume of goods sold is large;

2) consumers are concentrated in a relatively small area;

3) high level of service;

4) the presence of a "transit rate of goods", that is, the volume of each produced batch of goods is equal to the volume of a wagon (container);

5) developed warehouse network at points of sale;

6) the cost of production is much lower than the market price, which allows you to spend on maintaining your own sales apparatus;

7) the financial position of the company is sufficiently stable;

8) the product is not perishable and is not subject to obsolescence;

9) the firm has studied the market well.

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