Few DSCM Notes Part 1 <<Formatted>>

[sagar sankhe]

<<resent with missing question of online retailers and improved formatting>>

Hi all,

Below are questions taken from past papers and slide numbers shared by sir in last lectures:

Q. What is distribution and what is role of distribution channels?

Ans:

Product distribution (or place) is one of the four elements of the marketing mix. We make our product/service available for use to a consumer by direct/indirect means (intermediaries)

> Promotion: Intermediaries can attract and persuade customers to buy goods and services. (Ability to carry out sales promotion activities through media and personal contacts)

> Negotiation: Negotiate prices and terms-conditions with buyer & seller

> Information: Gather, distribute market research/intelligence to manufacturer important for marketing planning. Also to consumer: Information about new products, changes in design, style, prices 

> Ordering:  Place large orders with manufacturers on basis of small orders from consumers 

> Physical possession: Take possession of goods from producers, pass on to consumers

> Transfer of title: Transfer ownership of goods from producers to consumers

> Financing: buy goods in cash from producers and sell them to consumers on credit (acquiring and using funds to cover the costs of the distribution channel)

> Risk taking: Relieves producers from risks and enable them to concentrate on production (e.g. holding stock risk)

.

Q. What are the conflicts which can arise between channel members ?

Ans:

Behavior by a channel member that is in opposition to other corresponding channel member is a channel conflict ( is driven more by feelings than facts)

Goal conflict: rising out of mismatch in understanding of objectives by various channel members (conflicting goals, mostly misunderstanding)

Domain conflict: resulting due to mismatch of understanding of responsibilities and authority

Perception conflict: due to mismatch in reading of the market place and actions

Channel conflict also occurs when manufacturers (brands) dis-intermediate their channel partners, such as distributors, retailers, dealers, and sales representatives and sell their products directly to consumers through general marketing methods and/or over the Internet

Q. Write notes on Online retailing/Online shopping and cite an example?

Ans:

Is electronic commerce where consumers directly buy goods or services from a seller over the Internet without an intermediary service

For Consumers >

Advantages: Convenience, Price and selection, Information and reviews

Disadvantages: Fraud and security concerns, Lack of full cost disclosure, Privacy, Hands-on inspection

For Retailers >

Advantages:

> Requires lower investment (when compared to setting up a conventional, "brick-and-mortar" store)

> Extends your reach to new customers and new markets, and builds an extensive customer base

> Quicker Return on investment (ROI) than conventional, off-line selling

> Reduces customer acquisition costs by up to 70%

> Reduces transaction costs

> Reduces advertising and promotional costs (broadcast emails, digital marketing are les costly) 

> Faster inventory turnover

> Improves your understanding of your customers on a 1-to-1 basis (feedbak and online analystics pattern)

> Helps serve your customer better by giving her greater choice and greater convenience of shopping

> Increases brand value and brand recall

> Eliminates geographical boundaries for your business, and can establish a global market for your product or service

> No need to have high inventory (when demanded source it from supplier and ship it to consumer)

Disadvantages:

> Fierce competition (Jabong, Flipkart, Snapdeal, Tradus)

> Cost of reverse pick up for faulty/damaged/unsatisfied items is bear by the firm

> Cash on delivery option

> Occasional unavoidable logistics/delivery delay causing consumer dissatisfaction

> Uncontrolled use of rating/review and online criticism causing defamation 

Q. How do we motivate the channel partners?

Ans:

> Understand the Relationship: Nurture a relationship that makes sense and works for both firms 

> Train: Channel sales training must go beyond the sales training that you would normally supply to a direct sales force (top quality selling tools, such as competitive data sheets, sales scripts, testimonials as well as the usual brochures and specification sheets)

> Support: If the channel partners using your customized product for that target area, they’ll need more support and frequent communication for better relationship

> Provide incentives: Partner’s sales staff is far more likely to sell your product is they feel that there’s “something in it for them.” hence the incentives

> Spend some money: Ensures channel loyalty (help with channel’s marketing efforts e.g. joint funding of advertisements) (measure the impact of the money, through higher sales of your product)

> Limit the numbers. Recruit too many channel partners is a mistake, you can’t support all adequately and they’ll start competing with each other and may even create a price war for your product

> Create joint ventures: make the relationship successful, Invest your resources in training, marketing and sales support, channel will promote the solution within its target market.

> Get team consensus. If you sell your products both through direct sales and channels (imp reason for conflict), keep the both away from treading on each other’s toes (since it may end up fighting a price war)

> Target your markets: specify your customer base, (customers who are most likely to generate revenue/profit for both you and your partner

> Recruit a top manager. Channel managers need to be heavy hitters so that they can influence and direct channel strategy and behaviour

Q. Define efficient channel MIS?

Ans: 

Management information system (MIS) provides information that organizations use for efficient and effective management. 

five primary components: 

> Hardware, 

> Software, 

> Data (information for decision making), 

> Procedures and 

> People (employees)

Create MIS:

1. Decide what information is required

2. Organize information in a manner suitable for  interpretation and action

3. Decide who will use the information when and for what purpose

A Good Channel MIS will

> Integrate systems to handle daily stockpile data and store it for analysis

> Include decision support system (DSS to enable efficient deciosn making process)

> User friendly and user oriented (for comfort and effectivity of internal employees)

> Convey the information as to its purpose to target audience

> Be cost effective

> Less prone to defects and errors 

> Be fast (speed) and reliable (minimum system failures/down time)

Good channel MIS, it is necessary to define upfront for each element of the MIS they are:

> Purpose of the info

> Source of the info

> Action possible

> Impact on customer service

Q. What are channel partners? Why are they important?

Ans: 

In next email

Thanks & Regards,
Sagar Sankhe

Sagar Ramkrishna Sankhe

Ex-Employee: TATA CONSULTANCY SERVICES. (2009-2012)

MMS 2012-14

Consultancy & Entrepreneurship Committees Member at
Sydenham Institute of Management Studies, Research & Entrepreneurship Education (SIMSREE), Mumbai.
Contact No: 9773682257