Channel Management: Level, Dynamics, Advantage-
Jaiib/DBF Paper 1 (Module D) Unit 6
Dear bankers,
As we all know that is Channel Management for JAIIB Exam. JAIIB exam conducted twice in a year. So, here we are providing the Channel Management (Unit-6), SUPPORT SERVICES – MARKETING OF BANKING SERVICES/ PRODUCTS (Module D), Principle & Practice of Banking JAIIB Paper-1.
♦Market channel System
- Most producers do not sell their goods directly to the final users; between them stands a set of intermediaries performing a variety of functions. These intermediaries constitute a marketing channel. Some intermediaries such as wholesalers and retailers buy, take title to and resell the merchandise. They are called merchants.
- Other- brokers, manufactures representatives, sales agents- search for customers and may negotiate on the producer’s behalf but do not take title to the goods. They are called agents.
- Still Other- Transportation companies, independent warehouses, banks, and advertising agencies- assists in the distribution process but neither do they take title to goods nor do negotiate purchases or sales and they are called facilitators.
- Market channels are set interdependent organizations involved in process of marketing a product or service available for use or consumption. Marketing channel decision are the most critical decisions faced by management. The company’s channel decisions involve relatively long-term commitment to other firms, company’s pricing, advertising decisions, etc.
♦Channel levels
- Zero level: Direct marketing channel e.g: Internet sale, door to door sale
- One level: Contains one selling intermediary such as a retailer
- Two level: Contains two selling intermediaries viz, wholesaler and retailer
- Three level: Wholesaler, who sells to jobbers, who in turn sell to retailers
♦Channel Dynamics
- Vertical Marketing system (VMS): In conventional channels no members like producer, wholesaler or retailers have any dependency on each other. They are completely independent.
- Horizontal Marketing system: It is one in which two or more unrelated companies put together resources or programmers to exploit an emerging marketing opportunity. In this companies use another company’s established channel.
- Multi- channel marketing systems: With the proliferation of customer segments and channel possibilities, more companies have adopted multi-channel marketing,. It occurs when a single firm use two or more marketing channels to reach one or more customer segments.
♦Advantage of Channel Management
- Increased market coverage.
- Lower channel cost- for instance activating mobile banking rather than corresponding individually with customers.
- More Customized selling- using the technological advancement to mutual advantage and using the technical/ marketing personnel to sell more complex products.
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