Distribution System for various Product categories Direct Mfg.’s website Direct call By Sales Force/ Phone call/ Mail Order etc Own store Indirect Dealer/ Retail Store C&F Agent Stockist Retailer Central and/or Distribution Warehouse Wholesaler/ Distributor Retailer Manufacturer/Service Provider Customers
TYPES OF DISTRIBUTION SYSTEM DIRECT DISTRIBUTION SYSTEM INDIRECT DISTRIBUTION SYSTEM MULTIPLE CHANNEL SYSTEM
4.Factors affecting Choice of Distribution Market Variables Product Variables Firm’s Variables Marketing Intermediary Variables Nature of Market No. of Potential customers Geographic concentration of the market Order size Customer Value models Customer Buying Habits Unit sale value Bulk and Weight Perishable Nature Technical Products Product Line Nature of The product Financial Soundness Desire for Channel control Direct Distribution Strengths Managerial Capabilities Cost of each Proposed channel Contribution of Middleman in Value addition Availability of Desired middleman Firm marketing Intermediary Relationships dynamics
Distribution channel design To consume a product Service outputs have to be delivered Channels Participates in channel flows Activities have to be performed Thus performs activities
Example of a service output delivered template Available Consumer financing 7. Free for first two years, but available on payment afterwards. Also available at every city from where the product was bought. After sales support 6. Available Installation support 5. Other consumer goods items including that of other competitors are available at all the outlets where the products are otherwise Available Assortment 4. Not more than 2 days for any model Waiting time 3. There is at least one outlet for almost every 3 km radius excluding of course thinly populated areas Spatial convenience 2. Units are delivered in ones Bulk-Breaking 1. Service output delivered Service dimension Sl.No.
Channel flows and contribution to service outputs Bulk breaking, spatial convenience, waiting time Payment Bulk breaking, spatial convenience, waiting time Ordering Assortment Spatial convenience, waiting time, bulk breaking Financing Waiting time, bulk breaking, spatial convenience Risk taking Assortment Spatial convenience, bulk breaking Negotiation Is a service output in itself Spatial convenience Promotion Spatial convenience Ownership Assortment Spatial convenience, bulk breaking, waiting time Physical Possession Other contribution Indirect contribution Direct contribution Flow