Channel Management: Level, Dynamics, Advantage

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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