This document discusses sales, distribution channels, and distribution management. It defines key distribution concepts like market dimensions, sales techniques, the role of the sales force, and the selling process. It also explains different types of distribution channels including intensive, selective, and exclusive distribution. Finally, it discusses vertical marketing systems and considerations for planning distribution channels.

1. Sales and
Distribution
Team C2X !!

2. • Market ?
• What is Marketed ?
• Who Markets ?

3. Dimensions of Market
• Spatial Seperation
• Time Seperation
• Perceptional Seperation
• Seperation of Values
• Seperation of ownership

4. Sales ??

5. Sales Techniques
• Direct Selling
• Pro Forma Sales
• Agency Based sales
• Request for Proposal
• B2B

6. The Role of the Sales Force
Represent the Company
to Customers to Produce
Company Profit
Sales Force
Serves as a Critical Link
Between a Company and its Customers Since They:
Represent Customers to
the Company to Produce
Customer Satisfaction

7. Steps in the Selling Process
Step 1. Prospecting and Identifying and Screening For
Qualifying Qualified Potential Customers.
Learning As Much As Possible
Step 2. Pre-approach About a Prospective Customer
Before Making a Sales Call.
Knowing How to Meet the Buyer
Step 3. Approach to Get the Relationship Off
to a Good Start.
Step 4. Presentation/ Telling the Product “Story”
to the Buyer, and Showing the
Demonstration
Product Benefits.

8. Steps in the Selling Process
Seeking Out, Clarifying,
Step 5. Handling Objections and Overcoming
Customer Objections to
Buying.
Step 6. Closing Asking the Customer
for the Order.
Step 7. Follow-Up Following Up After the Sale to
Ensure Customer Satisfaction
and Repeat Business.

9. Distribution
Channels and
Management

10. Distribution
P C
R O
O N
D S
U DISTRIBUTION U
C M
E E
R R

11. Distribution’s Function
• The major purpose of marketing is to satisfy
human needs by delivering products of
various types to buyers when and where
they want them and at a reasonable cost.
• The “when and where” is the function of
Distribution

12. Distribution Objectives
• Minimize total distribution costs for a
given service output
• Determine the target segments and
the best channels for each segment
• Objectives may vary with product
characteristics
o e.g. perishables, bulky products, non-
standard items, products requiring
installation & maintenance
12

13. What is a Distribution
Channel?
• A set of interdependent organizations
(intermediaries) involved in the process of making
a product or service available for use or
consumption by the consumer or business user.
• Marketing Channel decisions are among the most
important decisions that management faces and
will directly affect every other marketing decision.

14. Distribution Channel Functions
Information
Transfer
Communication
Payments
Negotiation
Physical
Distribution
Ordering
Risk Taking
Financing

15. Basic Channels of
Distribution
Manufacturers/products
Agents/brokers
Wholesalers/distributors
Retailers Retailers
Consumers and organizational end users
15

16. Typical Distribution of Drugs
Manufacturers
Marketing Agents ( Optional )
Retailers/Wholesalers/Distributors
Private GPs/specialists Group Procurement
Office Retail
Pharmacy
Public Hospitals / Institutions
Patient 16

17. Typical Distribution in FMCG
Manufacturers
Marketing Agents ( Optional )
Wholesalers/Distributors
Retail Chains like Big Unorganized retailers
Bazaar etc. Public Canteens/
Government Purchase
Consumer 17

18. Business-to-Business Channels
Direct
Wholesaler
Agent

19. Business-to-Business Channel Trends
Infomediaries & Vertical Exchange

20. Conventional Distribution Channel vs.
Vertical Marketing Systems
Conventional Vertical
marketing marketing
channel channel
Manufacturer
Manufacturer
Wholesaler
Wholesaler
Retailer Retailer
Consumer
Consumer

21. Types of Vertical Marketing Systems
Corporate
Common Ownership at Different
Levels of the Channel
Administered
Leadership is Assumed by One or
a Few Dominant Members
Contractual
Contractual Agreement Among
Channel Members

22. Vertical Marketing
Systems
• Corporate systems - total ownership
• Contractual - legal relationships
• Administered - strong leadership

23. Horizontal Marketing
System
• Joining of two or more corporations on the same
level for the purposes of pursuing a new marketing
opportunity.
• Established to make use of combined resources
• Produce synergistic effect for all the parties involves
• Example: Nestle & Coke in Europe, FIAT in India

24. Planning the Channel of
Distribution
• Determining the structure
o Marketing mix strategy
o Organizational resources
o External environmental factors
o Market characteristics
o Consumer preferences
o Consumer behavior
o The nature and availability of Intermediaries
o Other environmental factors

25. Customers’ Desired Service Levels
• Lot size
• Waiting time
• Spatial convenience
• Product variety
• Service backup

26. Steps: Distribution Planning

27. Choosing a Distribution
System
Intensive
Distribution
Exclusive Distribution
Distribution Intensity
Selective
Distribution

28. Intensive Distribution
Producer
Seeks to obtain Retailer Retailer Retailer
maximum product
exposure at the retail Retailer Retailer Retailer
level
Retailer Retailer Retailer
Retailer Retailer Retailer
Retailer Retailer Retailer

29. Example of Intensive
Distribution
• Newspapers
• Most fast moving consumer goods
• Photo processing shops
29

30. Intensive Distribution
• Advantages:
o Increased sales, wider customer recognition, and
impulse buying
• Disadvantages:
o Characteristically low price and low-margin products
that require a fast turnover
o Difficult to control large number of retailers
30

31. Selective Distribution
Producer
Product is sold in Retailer Retailer Retailer
a limited
number of
Retailer Retailer Retailer
outlets

32. Example of Selective
Distribution
Daewoo has 2 distributors in Singapore
• “Starsauto, part of a larger Indonesian
group, represents Daewoo’s traditional line
of sedans.
• Homegrown family-owned JTA Motors
market Daewoo’s offroad vehicles like the
Musso and Korando, and an upmarket
model called the Chairman.
32

33. Selective Distribution
• Advantages:
o Better market coverage than exclusive distribution
o More control and less cost than intensive
distribution
o Concentrate effort on few productive outlets
o Selected firms capable of carrying full product line
and provide the required service
33

34. Selective Distribution (cont’d)
• Disadvantages:
o May not cover the market adequately
o Difficult to select dealers (retailers) that can match your
requirement and goals
34

35. Exclusive Distribution
Producer
Product is sold in
only one outlet in a
Retailer
given area

36. Exclusive Distribution:
Advantages
• Maximize control over service
level/output
• Enhance product’s image & allow
higher markups
• Promotes dealers loyalty, better
forecasting, better inventory and
merchandising control
• Restricts resellers from carrying
competing brands
36

37. Exclusive Distribution:
Disadvantages
• Betting on one dealer in each market
• Only suitable for high price, high margin,
and low volume products
37

38. Multiple-Channel Strategy
Using two or more different channels to
distribute goods and services
• Why ?
o Permits optimal access to each market
segment
o Increase market coverage, lower channel
cost and provide more customized selling
• What to look out for ?
o More channels usually means more conflict
and control problems
38

39. Complementary Channels
Each channel handles a product or segment that is
different or non-competing e.g.
• Toyota Lexus
• Magazine distributions
39

40. Competitive Channels
The same product is sold through two different and
competing channels e.g.
o Non-prescriptive drugs
o Electronic goods
• Why ? To increase sales
• What to look out for?
o Over extending yourself
o Dealers’ resentment
o Control problems
40

41. Developing Distribution Tactics
Selecting Channel Partners
Managing the Channel of Distribution
Channel Leader Power
Reward or
Economic Legitimate
Coercive
Power Power
Power
Distribution Channels & the Marketing Mix

42. Physical Distribution
Inventory Order Processing
Control Received
When to order Processed
How much to order Shipped
Physical
Distribution
Transportation Functions Warehousing
Rail, Water, Trucks, Number Needed
Air, Pipeline, Where
Internet What Type
Materials Handling
Moving Products Into,
Within, and
Out of Warehouses

43. Transportation Modes
Rail
Cost-effective for shipping bulk products,
piggy-back, fishyback, birdyback.
Water
Low cost for shipping bulky, low-value,
non perishable goods, slowest form.
Truck
Most important carrier for consumer
goods, flexible.
Air
High cost, ideal when speed is needed or
distant markets have to be reached
Pipeline
Carry petroleum based products,
very low cost, requires little energy.
Internet
Web sites have products available, used
especially for services.

44. Channel Relationships
• Cooperation
• Conflict
• Power
– Coercive
– Expert
– Legitimate

45. Decision Making Framework
Prospects Importance of threatened channel in
of terms of current or potential volume
Destructive or profitability
Conflict
High Low
High (FIRE) Act to avert or address Allow threatened
conflict channel to
decline
Low Look for opportunities Do nothing
(Smoke) to reassure threatened
channel and leverage
your power

46. All the Best for Summers
☺
Feel free to contact
Team C2X
for any query!!