Question

You are an entrepreneur who has developed a new electric bike. You have contracted exclusive production and now face the task of channel design for the new product to assure all possible outlets. You have to think through all the possible outlets for bicycles, decide which would be most appropriate and consider what it would take to get your product in those outlets.

1. List the types of outlets where your customers might purchase your bike.

2. List all the marketing intermediaries [not complete supply chain] you need in order to reach these outlets.

3. Consider in detail what functions would each intermediary perform to add value to the channel?

4. Draw the marketing channel of distribution from your company to the end user.

Answer 1

1) The type of outlets where cutsomer might purchase the bike are Multi brand retail outlets, Single Brand outlets, and Company owned outlets.

2)The Market intermediaries needed to reach these outlets are wholesalers, retailers, Distributors, Marketing agencies, agents, E commerce sites etc.

3)The manufacturer will sell to distributor who keeps a large amount of stock with him. The manufacturer passes on the cost of inventory to the distributor. The distributor can sell it to wholesellers who can reach the local areas. These wholesellers then sell to retailers who has reach to the end customer. The Value that these intermediaries add is that the costs of inventory are shared and these intermediaries can reach the people where the manufacturer cannot reach directly. Also, these intermediaries provide local service for products.

Marketing channel

1) Manufacturer

2)Distributor

3)Dealer/Wholeseller

4)Retailer

5)E Commerce sites

6)End customer