Marketing sales systems

To ensure the competitiveness of its products, an enterprise must be able to manage prices and quality of customer service. For this purpose, marketing sales systems are formed.

From the point of view of interaction in the “manufacturer-consumer” chain, the following are distinguished:

1. Traditional marketing systems.

All intermediaries are independent, there is no control from the manufacturer. Historically, it existed in conditions where demand exceeded supply.

2. Vertical marketing systems.

All intermediaries are organized into a system of relationships; the manufacturer can monitor the conditions of distribution of goods on the market at all stages. Types of vertical marketing systems are presented in Fig. 4.43. Corporate - in conditions where it is economically feasible, the company organizes its own sales network. Contractual - all independent intermediaries are in a system of contractual relationships. Managed - on the market major participant, which dictates the “rules of the game” to everyone else. An example is the diamond business.

Rice. 4.43. Types of vertical marketing systems

3. Horizontal.

Cooperation between companies is carried out on a temporary or on an ongoing basis and involves the creation of joint ventures at various levels of promotion. One example would be a situation where car dealers organize the provision of lending services directly at car dealerships;

4. Multichannel.

Sales of goods are carried out using our own and external distribution channels.

A special case of vertical marketing systems in the consumer market is the use of network (multiline) marketing. Allows for personal contact with the consumer, significantly reducing sales costs, and stimulating sales. However, in most countries, the use of this type of marketing is associated with legal problems.

Sales types

Distribution channels can be direct or indirect. The use of indirect sales channels involves one of three types of sales:

1. Intensive sales.

The company attracts the maximum number of resellers to sell its products. This type of marketing is most suitable for consumer goods, raw materials, non-labor-intensive services, etc.

2. Selective marketing.

The company uses only resellers selected according to certain criteria for sales. This type of distribution is most suitable for pre-selected goods.

3. Exclusive sales.

This is an extreme case of selective marketing. Only one merchant receives the right to sell branded products in a certain territory. Most suitable for special demand goods.

Types of Resellers

Intermediaries in the industrial market

On industrial market Distributors, dealers and jobbers act as intermediaries.

A distributor is a merchant under an agreement concluded with a manufacturing company for the right to sell products in a certain territory and within a specified period.

Dealer - physical or legal entity which carries out activities at its own expense and on its own behalf.

Jobor is a dealer who works on separate temporary agreements, as a rule, associated with the sale of individual batches of goods.

Sales of goods can be represented in the form of a diagram (Fig. 4.44).

Types of dealership:

• - exclusive - only a certain company distributes the products of the manufacturer;
• - exclusive in a certain territory - the same, but in a certain territory;
• - agreement on forced assortment - when the buyer is forced to buy in assortment."

A special distribution option is operating on a franchise basis.

Rice. 4.44.

Types of franchise: manufacturer, trader, services, industrial franchise.

Advantages of working under a franchise: access to know-how, technical and economic advice, original, proven market conditions assortment The success rate is 75-80%. Under normal conditions, the failure rate of firms in the market reaches about 80% within 3-5 years.

Types of wholesale intermediaries

I. Intermediaries from the enterprise

1. Sales representatives.

As a rule, they are not directly involved in sales, but research the market, enter into supply contracts, and organize a sales network.

2. Agents of the enterprise.

Act on behalf and at the expense of the enterprise.

II. Independent intermediaries

• 1. Brokers (brokers) - bring the seller together with the buyer.
• 2. Agents of specialized agencies - represent the interests of more than one enterprise on behalf of the enterprise, without ownership rights.
• 3. Commission agents - act on their own behalf, but on behalf of a third party, at the expense of the client. A special type of commission agent is consignee (with the transfer of goods, but without transfer of ownership, trade from the consignee's warehouse).
• 4. Purchasing centers. Act in the interests of a group of independent companies.

III. Wholesalers-merchants.

These are dealers, distributors, jobbers. They act at their own expense, on their own behalf, with ownership rights.

Intermediaries in the consumer market

The classification of retailers according to the volume of services provided to consumers is presented in Fig. 4.45. Classification of enterprises retail: Convenience - small retail store"at home", at gas stations and the like. The main difference is the small area (up to 400 m2), proximity to the buyer, and a small but well-developed assortment.

Cash&carry is a “cash payment plus pickup” store. In the classic version, this is a wholesale or small-scale wholesale store with a large area, aimed at wholesale and small-scale buyers who buy goods for subsequent resale.

A classic supermarket is a self-service store with a single payment center and retail space 600-1800 m2. Trade predominantly food products, the non-food group of goods is poorly represented.

A discounter (economic supermarket) is a self-service store with a single payment center that sells everyday goods. Mostly modest store design, limited assortment (as a rule, does not exceed 1500-2000 items). The average retail area is 250-400 m2.

A hypermarket is a self-service store with a single payment center with a large retail area (at least 2.5 thousand m2). The ratio of food and non-food products approximately 6:40.

rjBGTU "VOENMEKH" named after. D.F. Ustinova
Faculty of International Industrial Management
Department of Marketing

FORMATION OF A SALES SYSTEM

Student:

Ipatova Alena Vasilievna

Group R-191

Teacher:

Kuligin D. A.

Saint Petersburg
2010

Content

Introduction

In most markets, the distance between producer and consumer is such that to effectively sell products, a sales system is needed to match supply and demand. This necessity is caused by the fact that the manufacturer is not able to take on all the functions associated with the exchange of goods that potential and actual consumers expect to receive.
Thus, proper distribution of goods is one of the most important factors in the competitiveness and profitability of a company, which is why the cost of marketing distribution channels is half the cost of the final product.
Accordingly, the choice of a sales network (distribution channels) for a company is a strategic decision that must be consistent with both the expectations in the target segment and the goals of the company itself.

General concept of the sales system and sales policy

A significant place in the marketing mix system is occupied by the policy of organizing distribution channels, or sales policy. Its purpose is to organize an optimal sales network for effective sales of manufactured products. 1
The ultimate goal of any sales process is to obtain payment for the product or service provided. Achieving this goal is only possible if sales activities are effective in organizational process. But still, product sales must be considered as an integral element of the marketing mix. Other components of the marketing mix are product, price and promotion system.
Sales is a system of relations in the field of commodity and money exchange between economically and legally free subjects of the sales market, realizing their commercial needs. The subjects of the sales market are sellers and buyers, and the object of sale is the product itself in the marketing sense of the word. 2
The formation itself sales policy based on “bringing the product to the consumer.” This includes choice optimal scheme delivery of a product from manufacturer to consumer, its sale (physical distribution), or product distribution, as well as after-sales (service) service to consumers.
Some economists also include some commercial issues in sales policy. Such as preparing, negotiating sales and purchase transactions, concluding contracts, monitoring their implementation, etc. Entrepreneurs must pay special attention these issues, since the efficiency and effectiveness of the optimal construction and regulation of distribution channels is considered more effective than, for example, pricing policy.

Structure and types of distribution channels

One of the key issues in bringing a product to the consumer is the choice of the type of distribution channel for different types of product.
A distribution channel is a number of organizations or individuals involved in the process that makes a product available for use and consumption by consumers, that is, it is the path that a product takes from producer to consumer. Participants in this very channel perform the following functions: collection and distribution of marketing information; sales promotion; establishing contacts; creating a product that meets consumer requirements; negotiations; transportation and storage of goods; financing the functioning of the channel; taking on the risk for the functioning of the product. We'll look at the functions of distribution channels in more detail later.
Any distribution channel includes the following flows: physical products, ownership of them, payments, information and product promotion. As for the sphere of goods and services, these are intangible products (knowledge, ideas, etc.).
The simplest distribution channel consists of a manufacturer and a buyer. In this case, the sales system is simple. Most often, there are intermediaries in the channel who perform certain work to bring the product closer to the consumer. These intermediaries are the channel layers. In most cases, effective marketing of goods is impossible without the participation of intermediaries. These intermediaries include agents or brokers, wholesalers, and retailers. Such a system is complex.
There are three different methods of distribution channels:
- direct (immediate), when the manufacturer directly enters into a relationship with the consumer, without resorting to the services of intermediaries;
- indirect, in the case when the manufacturer resorts to independent intermediaries;
- combined (mixed), when the manufacturer uses an organization with mixed capital(including funds from the manufacturer and an independent company) as an intermediary.
Manufacturers can also use multiple distribution channels simultaneously to reach different target markets.

Organization of the sales system

When planning a sales policy, a company solves a number of important issues regarding the organization of a sales network:
- determine the strategy of sales policy and organization of distribution channels, interconnected with the main objectives of the marketing strategy of the company as a whole;
- determine methods and types of distribution channels for different products and market segments;
- determine the number of channel levels, that is, the number of intermediaries along the entire distribution chain;
- choose a sales channel management system and a form of establishing legal and organizational relations;
- establish the width of the distribution channel, that is, the number of independent participants at individual levels of the channel’s sales chain;
- determine the feasibility of using simple or complex sales systems;
- determine the optimal combination of different sales channels for the entire range of products.

Functions of sales channels

In the marketing system, sales firms or sales departments of companies, performing the functions of sales channels, solve the following tasks:
- distribution and marketing of manufactured products;
- purchase of raw materials and supplies required for production;
- establishing direct contacts with consumers and final buyers of goods, conducting negotiations;
- preparation and conclusion of sales contracts and monitoring their quality execution;
- implementation of a stimulating policy of promoting goods to consumers, advertising events, sales, exhibition work, etc.
- participation and assistance in planning the product range;
- bringing the product to the required level of consumer requirements of a particular market;
- financing the costs of operating distribution channels and sales operations.
Such a wide range of functions performed by sales firms ensures the sale of goods in most cases more efficiently and with lower costs per unit of goods than with the direct sales method.
Using intermediaries is sometimes the only way to sell. For example, at auctions, exchanges, or in cases where contact with the consumer is impossible due to political or legal regulations.

Selecting a Reseller

When choosing a reseller, great care and caution is required, since the quality of sales activities in the market and the course of commercial operations over a long period of time in general depend on the correct choice. Therefore, it is necessary to perform the following actions in relation to the intermediary company:
- make sure that the selected intermediary is not an intermediary of a competing company at the same time, since it can completely block the sales market;
- give preference to a specialized intermediary, all other things being equal, since he has more experience in selling this particular product;
- prefer a more well-known company with a higher reputation in the market;
- find out the sources of financing for the intermediary - whether loans are provided to him and which banks;
- determine the level of equipment of the intermediary’s material and technical base, the level of qualifications of the working personnel;
- enter into trial short-term agreements in order to learn about the capabilities and business responsibilities of the intermediary firm;
- visit the intermediary company, determine its reliability and competence;
- expand the number of intermediary organizations involved, since with a limited number of them, dependence on them increases, respectively, the degree of risk;
- take into account the location, number of stores, specialization and range of goods and services sold, general marketing concept and intermediary program.

Types of marketing sales systems

Firms use traditional, vertical, horizontal and combined sales marketing systems.
The traditional distribution system consists of an independent manufacturer, one or more wholesalers and one or more retailers and the consumer. All participants in such a distribution system find each other on the free market, do not bind themselves to long-term obligations, are independent and not controlled by other participants in market relations. They pursue the goal of maximum profit primarily in their area of ​​the sales system; they are not interested in issues of optimizing profits throughout the sales system as a whole.
Vertical distribution system is a relatively new type of distribution channel that acts as unified system, as it includes a manufacturer, one or more wholesalers and one or more retailers, all pursuing common goals and interests. Usually, one of them plays a leading role.
Vertical systems are divided into three more types:
- corporate (within a single organizational structure of one company, united by ownership status);
- contractual (within the framework of contractual relations and coordinating programs), subdivided, in turn, into voluntary associations of retailers under the auspices of wholesalers; retailer cooperatives; franchised; organization of holding privileges;
- indirect influence, which are formed under the influence of the size and financial power of one of the participants and its authority in the market.
A horizontal sales system is the unification of the sales systems of two or more companies in the joint development of emerging marketing opportunities in a specific market, for example, when there are insufficient funds, knowledge, and capacity to organize all marketing work or there is too great a risk of developing a new market.
A multi-channel sales system involves the use of both direct and indirect sales methods, that is, trade is organized through its own network, as well as through independent intermediaries. The combined sales system involves the use various types building a sales network, including a number or all of the above. 3

Choosing a sales channel structure

Theoretically, the best distribution channel is one that provides:
- use of all intermediate functions;
- use of intermediate functions better than competitors;
- lower relative share of expenses compared to other channels.
The choice of a particular distribution channel is determined by a number of factors and parameters of the product itself, purchasing behavior, market conditions, etc. The set of such criteria can be quite large.
When choosing a configuration, various approaches can be used (as a rule, these issues are resolved within the framework of sales logistics). There are formalized methods for selecting the optimal distribution channel: methods based on the use of economic and mathematical models, optimal management methods, heuristic methods.

Formation of a sales system

When forming a sales system and a network of distribution channels, it is necessary to take into account many factors. The main ones are the following.
1. Features of end consumers - their number, concentration, average one-time purchase, income level, pattern of behavior when purchasing goods, required store opening hours, volume of services of sales personnel, preferred credit conditions.
2. The capabilities of the company itself. Such as its financial position, competitiveness, main directions of market strategy, scale of production. In particular, it is preferable for small firms with a narrow product range and limited financial resources to work through independent resellers, while large firms are recommended to carry out a certain part of sales operations through their own sales network.
3. Characteristics of the product - type, average price, seasonality of production and demand, maintenance requirements, shelf life, etc. For example, a company should sell expensive and unique goods directly, that is, through its own sales network. As for inexpensive mass goods, they can be sold indirectly, through independent intermediaries.
4. The degree of competition and the sales policy of competitors - their number, concentration, sales strategy and tactics, relationships in the sales system.
5. Characteristics and features of the market - actual and potential capacity, brand, customer distribution density, average per capita income.
6. Comparative costs of different distribution systems and distribution channel structures.

Product distribution process

After choosing a distribution channel, it is necessary to organize their effective functioning, that is, resolve issues in the field of physical distribution, which includes working with orders, handling cargo, organizing warehousing, inventory management and transportation.
The main goals of the product distribution process are formulated in the area of ​​ensuring the required level of satisfaction of consumer requests while minimizing the costs of organizing and implementing this process.
When designing a product distribution process, it is necessary to coordinate production and marketing issues. Their solution must be consistent, that is, not basing decisions on local optima, but trying to find optimal solution generally. This is where marketing problems intersect with logistics problems.
Now let's look in more detail at the individual physical distribution operations. Working with orders includes: receiving orders, processing and fulfilling them. Cargo handling is important both from the point of view of efficient organization of warehousing and from the point of view of transporting cargo from the place of production to the place of its use. The organization of warehouse facilities includes the design of the use of warehouses, means of transportation, and goods stored in them. Warehousing of goods allows you to maintain price levels and meet seasonal demand. Inventory management consists of creating and maintaining stocks of goods of the appropriate range and in the appropriate quantities necessary to satisfy consumer demands. In general, the optimization problem is complex and very important. There are two problems here. Inventory managers need to know when to replenish inventory and how many items to order.
Transportation of goods also plays an important role. Since it is used for different types of goods different type transport.
The costs of implementing the physical distribution functions discussed above account for about a third of all marketing costs. Having a significant impact on the level of customer satisfaction, these functions have great value for a marketer.

Management and control in the distribution channel

At the highest level, sales system management is associated with its formation, expansion, restructuring and reduction, which ensures optimization of sales channels. The sales benchmarks used for this purpose can be both quantitative and qualitative parameters.
Quantitative parameters of sales: sales volume (cannot be higher than production volume, but must correspond to the planned market share); sales speed; level of required inventories; sales costs; minimum level of profitability, etc.
Qualitative parameters of sales are those that should reflect the planned market positions. Among them: the width and length of sales channels; store positioning, etc.
The main method of optimizing sales channels is optimization based on the analysis of sales costs.
Sales costs are measured by the total trade margin or the difference between the selling price to the end user (consumer) and the original selling price. The trading margin of a particular intermediary is the difference between the prices at which he sells and buys. For an indirect channel that includes several intermediaries, the trade margin is equal to the sum of the margins of successive intermediaries. The size of the markup depends on the position of the intermediary in the distribution network and should reflect the sales function it performs.
In coordinated channels, the manufacturer’s task is to establish tariff (recommended) prices that, on the one hand, would provide sufficiently attractive and “fair” working conditions for all participants, and on the other, would take into account the final pricing factors. The more intermediaries there are between the manufacturer and the final buyer, the more difficult it is to do this.
Features of direct sales channel management. The organization and management of a direct sales channel is largely based on the problems of working with clients. Coming to the company, the consumer becomes a client. To determine the effectiveness of working with clients, it is necessary to conduct a client analysis, which may include the following procedures:

Identification of customer contact points (TCC).
Conducting surveillance in TKK:

- level of communication with the client;
- is there a queue;
- what the client is doing in the queue.
3. Determining what the client is uncomfortable with and what he would like.
4. Conducting statistical analysis.
5. Conducting interviews and questionnaires.
The opinion of former clients is also extremely important. They can say why they left, plus they are more open.
Client analysis allows you to increase sales by 10-20%, because otherwise, due to the stereotypes that have developed among the staff, no problems are visible.
There are two main modes of working with clients:
- “Regular contacts.” Sales personnel should focus on regular contact with existing and potential sales personnel to ensure continued orders from them.
- “Single contacts”. In this case, sales personnel usually make one-time contacts with customers.
Organization of direct sales with regular contacts can be carried out on the basis of the following information: approximate number of customers; the frequency of contacts that should be maintained with each of the identified customer groups; the average number of contacts per week that a company's sales representative must make for his type of product.
The approximate number of clients will be determined based on overall strategy marketing companies. As a rule, the following types of customers are distinguished: loyal (a regular customer who will not purchase competitors' products under other normal conditions); erratic (client constantly changing suppliers depending on the situation and different conditions); negative (opposed to a given company); undefined (nothing is known about the client). Accordingly, the company faces different tasks for each group of clients.

Product sales promotion

Sales promotion refers to short-term incentives that promote the sale or distribution of products and services. The trend in recent years shows that sales promotion costs are increasing. Compared to advertising costs. One reason is the difficulty of assessing the effectiveness of advertising. Assess the effectiveness of sales promotion methods.
Fragmentation of the market into smaller and smaller segments makes advertising campaigns relatively more expensive. This is also the reason for paying more attention to stimulating sales and reducing prices due to lower advertising costs. Among other enterprise costs, sales promotion costs take second place.
Nevertheless, sales promotion is considered not such a universal method of increasing production volumes as advertising, since its use is episodic in nature or represents the final component of the same advertising. Therefore, the corresponding costs are usually included in the advertising budget.
Now let’s give a clearer definition of the concept “sales promotion”. Sales promotion is a set of techniques used throughout the entire life cycle goods in relation to three market participants (consumer, wholesaler, seller) with the aim of short-term increasing sales volume, as well as increasing the number of new buyers.
There are three types of sales promotion objectives:
- strategic (increase the number of consumers; increase the quantity of goods purchased; revive interest in the product);
- operational (to capitalize on annual events; to take advantage of any particular opportunity; to support an advertising campaign);
- tactical (accelerate the sale of the most profitable product; increase the turnover of any product; get rid of excess inventory; counteract emerging competitors).

Conclusion

Thus, in this work I examined what a sales system is, its structure (what elements it consists of), its functions and types, as well as the meaning of this element of the marketing mix.
In a market economy, management in the sales system is one of the most important stages of the enterprise. It is here that the consumer either recognizes or does not recognize all the efforts of the company as useful and necessary for himself and, accordingly, buys or does not buy its products and services.

List of used literature:

1. V.N. Naumov “Sales Marketing”, Internet resource;
2. J.M. Evans, B. Berman “Marketing”, M.: Economics, 1990.;
3. R.B. Nozdreva, V.Yu. Grechkov “Marketing”, M.: Yurist, 2002;
4. E.P. Golubkov “Fundamentals of Marketing”, M.: Finpress;
5. INGECON textbook “Marketing”.
6. F.Kotler, K.L.Keller “Marketing Management”, St. Petersburg: Peter, 2006.
etc.............

Contents of the sales policy. The concept of distribution. Sales goals and objectives. Types of distribution channels and choice of distribution method (direct, indirect, combined). Types of market coverage: intensive, selective, exclusive. Types of intermediaries and their characteristics: wholesalers, distributors, dealers, agents, brokers. The decision to select intermediaries and determine the terms of cooperation.

Distribution is a functional complex consisting of sales, logistics and marketing systems, designed to organize the storage, sale and movement of goods from the manufacturer to the buyer.

Each of the components of the distribution system (sales, logistics, marketing) solves its own specific problems. At the same time, these tasks must be functionally interconnected.

Sales task –

a) build the paths (channels) along which the goods will be delivered to the buyer;

b) develop a buyer search system;

c) develop a customer relationship support system.

Logistics challenge(distribution) –

a) determine the number, size and location of warehouses;

b) establish the need for the quantity and type of transport;

c) determine the number of logistics services;

d) calculate and maintain the optimal size of warehouse stocks.

Marketing, in the distribution system, performs the following functions:

¨ market research (demand trends, identifying new markets, determining what is missing in the market, etc.);

¨ development of sales forecasts;

¨ development of product promotion programs;

¨ organization of information flows for sales, purchasing, and company management departments.

The main task distribution is the creation of an optimal organizational structure for sales and logistics, based on the requirements of efficiency, productivity and convenience for customers.

Sales policy- a system of decisions made by the seller in order to implement selected strategies and obtain the greatest effect of selling goods on a specific market or to a specific client.

Main goals of the sales policy:

¨ Increase in sales volumes

¨ Increasing the market share of a company or individual brand

¨ Increased profits

¨ Maintaining market share (segment) or maintaining an occupied niche

¨ Exit to new market and gaining a share of target segments

¨ Introducing a new product to the market

¨ Attracting new clients and clients of competitors

¨ Retention of old clients

The most important strategic decisions when organizing sales:

1. Determination of the type and number of distribution channels (traditional channel, e-commerce, sales by catalogs, sales by samples, etc.).

2. Selecting a sales method (direct, indirect, combined).

3. Establishing the intensity of market coverage (intensive, selective, concentrated, exclusive).

4. Determination of types of intermediaries (wholesalers, retail) and determination of their role in distribution channels.

At the same time, it is necessary to assess the possibilities of wholesale and retail (size of turnover, level of specialization, ability to provide logistics, technological and service services).

5. When developing regional sales - determining the level of centralization of decisions in the field of sales (decisions can be centralized or decentralized).

6. Selecting the level of sales integration (determining the level of vertical and horizontal integration).

7. Deciding on the need for competition, both in sales channels and between channels, competition in sales channels.

In Fig. shows an algorithm for making strategic decisions on the design of the company's sales system.

Fig. Strategic sales decisions (J.-J. Lambin)

Classification and characteristics of sales methods

The general classification scheme is presented in table.

Classification sign	Types of sales
Depending on the availability of intermediaries	a) Direct sales; b) Indirect sales; c) Combined sales;
Depending on the number of intermediaries in the vertical chain of the distribution channel	a) Short distribution channel (one intermediary); b) Long distribution channel (two or more intermediaries).
Depending on the number of intermediaries at each channel level	a) Wide distribution channel; b) Narrow distribution channel.
Depending on the method of market coverage	a) Intensive sales; b) Selective marketing; c) Concentrated sales; d) Exclusive sales.

The main types of distribution channels are shown in table.

Types of distribution channels

The advantages and disadvantages of direct and indirect sales methods are given in table.

Direct sales		Indirect sales
Advantages	Flaws	Advantages	Flaws
1. The company can make more profit 2. The share of cash is increasing 3. The manufacturer knows the consumer well 4. Direct control of prices and product quality 5. It’s easier to maintain your image. 6. Consumers are more willing to buy from the manufacturer 7. Flexible pricing policy	1. Costs for maintaining the sales structure are increasing 2. Commodity accounting becomes more complicated - cash flows 3. The need for large investments 4. Limited service area 5. Small sales volumes	1. Shipment of large quantities of goods is possible 2. New markets are developed faster 3. Customers’ needs for availability, quantity, speed, and service are better satisfied 4. The manufacturer can concentrate on production	1. Lost control over prices and quality of goods 2. The manufacturer understands the consumer less well 3. Profits are reduced by providing discounts to intermediaries 4. The manufacturer, working through wholesalers, becomes too dependent on him 5. Intermediaries are unpredictable

The classification of the most common types of wholesale companies is given in table.

Classification of wholesale companies

Types of wholesale companies	Brief description
Wholesale resellers	There are both wholesale companies with full or partial service. The most common form wholesale trade
Trading Houses	In Russia, they are often organized by manufacturers to intensify sales efforts
Wholesalers-traveling salesmen	They make rounds of stores, offering them a limited assortment. popular goods, used cash
Distributors	They work under distribution agreements concluded with the supplier-manufacturer.
Wholesalers-exporters	In the consumer market: stores equip their own departments and set prices independently. They promote products of famous brands. In the industrial market: they organize consignment warehouses for selling products
Wholesaler agents	They organize transactions between the buyer and the seller and carry out transit deliveries of goods, while receiving commissions

There are simple and complex sales systems.

Simple system assumes the presence of two links in the sales chain: producer and consumer, i.e. the actual absence of special sales organizations is called the zero-level channel (Fig. 4.10).

Rice. 4.10. Simple distribution system

Complex systems are represented by multi-level links, including a network of their own sales branches and subsidiaries, independent sales intermediaries, wholesale and retail companies. For example, a single-tier channel includes one independent intermediary, typically a retailer; A two-level channel includes two types of intermediaries, usually a wholesale and a retail organization. The three-tier channel includes three types of intermediaries, such as a large wholesaler, a wholesaler and a retailer (Figure 4.11). The length of the distribution channel is determined by the number of levels. The width of the distribution channel is formed by the number of intermediaries of the same type (at the same level) (Fig. 4.12).

Rice. 4.11. Complex distribution systems: ∆ – retailer;  – wholesale trader;  – large wholesaler

Rice. 4.12. Width (5 units) of a sales channel of one level: ∆ – retailer

This type is also common complex system sales, as a double (or more) system of distribution channels, when a manufacturer in the same market uses two (or more) independent or interconnected distribution channels.

Organization of a sales network

When planning a sales policy in the marketing mix system, a company must resolve a number of important issues regarding the organization of a sales network:

Determine the strategy of sales policy and the policy of organizing distribution channels in relation to the main objectives of the company’s global marketing strategy;

Determine the methods, or types of channels, of product distribution, their combination for various groups of goods and market segments;

Determine the number of channel levels (length and extent of the channel) - the number of sales participants or intermediaries (usually independent intermediaries) along the entire distribution chain;

Choose a sales channel management system and a form of establishing legal and organizational relations;

Determine the dominant role of the producing company or trade form;

Set the width of the distribution channel - the number of independent sales participants at individual levels of the distribution chain of the distribution channel;

Formulate the level of intensity of the distribution channel: exclusive, exclusive distribution and sales (an extremely small number of sales organizations in a specific market), selective, selective sales (the average number of sales organizations in a specific market, i.e. more than one, but less than the total number, ready to engage sale of a given product), intensive sales (a large number of sales organizations in a particular market);

Determine the feasibility of using simple and double (or complex) sales channels;

Determine the optimal structure for combining and combining various sales channels across the entire range of products.

Firms use traditional, vertical, horizontal and combined sales marketing systems.

A sales system is a complex consisting of an enterprise’s sales network and those distribution channels that use it to sell goods.

Sales system functions:

formation of a sales strategy;

selection of distribution channels;

generation and processing of an array of documentation reflecting consumer orders (including intermediate orders);

product packaging;

formation of batches of goods in accordance with the needs of consumers;

storing goods before transportation and their necessary modification in warehouses;

organization of transportation of goods;

assistance to intermediaries in the organization effective sales goods;

collection and systematization of opinions of final and intermediate consumers about products and the enterprise.

Organization of the sale of goods to the final consumer can be carried out by:

offers of goods in retail trading company(“merchandising”);

licensed trade (“franchising”);

direct contacts with consumers (“direct marketing”).

A distribution channel is a series of organizations or individuals involved in the process of making products available for use or consumption by individual consumers or organizations.

A distribution channel is the path along which goods move from the producer to the consumer.

In the marketing mix, distribution (sales) channels perform two functions:

ensuring the availability of goods - the formation of distribution channels taking into account market conditions, the type of product, and the capabilities of the enterprise;

physical movement of goods (marketing logistics) - organization of movement material flows through distribution channels (warehousing, transportation, receiving and processing orders, packaging, shipping, etc.).

Distribution channel characteristics include:

channel length is the main indicator determined by the number of links;

channel width - the number of participants in each link of the distribution channel.

Distribution channels can be characterized by the number of channel levels.

The channel layer is any intermediary that performs certain work by bringing the product and ownership of it closer to the final consumer.

There are channel 0 level, single-level, two-level. If there are no intermediaries between the producer and the consumer, then such a channel is called a zero-level channel. If there is one intermediary between them, for example, a wholesaler, then this is a single-level channel. If there is a wholesaler and a retailer, there is a two-level channel.

To reach different target markets, manufacturers can use multiple distribution channels simultaneously, thereby increasing the width of the distribution channel.

Types of distribution channels

The choice of sales channels for goods is a complex marketing decision, since they most directly affect the effectiveness of the implementation of the marketing concept in the enterprise.

Sales (distribution) channel is a set of firms or individuals involved in the process of promoting a product from manufacturer to consumer.

The activities of distribution channels are characterized by their own functions, conditions and restrictions.

The choice of an alternative distribution channel option depends on many factors and, first of all, on the purpose and nature of the goods.

A zero-tier channel (also called a direct marketing channel) consists of a manufacturer selling a product directly to consumers. (producer-consumer)

Intermediary in a single-level channel in the market consumer goods Usually there is a retail trader, and in the market for industrial goods - a sales agent or broker (intermediary). (manufacturer-retailer-consumer)

The intermediary in a two-level channel in the consumer goods market is usually a retailer, and in the industrial goods market - an industrial distributor (trader) dealer (wholesaler or retailer). (manufacturer-wholesaler-retailer-consumer)

With a three-level channel, between wholesale and retail there is usually a small wholesaler who buys goods from large traders and resells them small businesses trades that large wholesalers typically do not service. (manufacturer-wholesaler-small wholesaler-retailer-consumer)

For most businesses that effectively implement the marketing concept, the problem is not choosing one channel over another, but rather choosing the best combination.

It is believed that the fewer intermediaries between the manufacturer and the consumer, the greater the company's expenses, since it is forced to create the necessary stocks of goods, ensure their storage, processing, and then wholesale distribution. At the same time, from the producers' point of view, the more intermediaries a firm uses, the less direct contact it has with consumers and the lower the degree of control it has over its marketing structure.