Distribution strategy


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strategies for distribution

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Distribution strategy

  1. 1. Distribution Strategy Peter Angele Ileana Szczepanski Niklas Reissinger OverviewDefinitionDistribution ChannelsChannel StrategyChannel ManagementPhysical DistributionPhysical Distribution SystemEthical Issues Distribution Strategy 2
  2. 2. DefinitionDistribution is one of the four aspects ofmarketing. A distributor is the middlemanbetween the manufacturer and retailer.After a product is manufactured it istypically shipped (and usually sold) to adistributor. The distributor then sells theproduct to retailers or customers Distribution Strategy 3 Distribution ChannelsTo reconcile the needs of producers andconsumersTo improve efficiency by reducing thenumber of transactions and creating bulkTo improve accessibility by loweringlocation and time gaps between producersand consumersTo improve specialist services to customers Distribution Strategy 4
  3. 3. How a channel intermediaryincreases distribution efficiciency Distribution Strategy 5 Distribution ChannelsConsumer Channels Distribution Strategy 6
  4. 4. Distribution ChannelsB2B Channels Distribution Strategy 7 Distribution ChannelsServices Channels Distribution Strategy 8
  5. 5. Channel StrategyChannel strategy decisions involve selection of the most effective distribution channel most appropriate level of distribution intensity and degree of channel integration Distribution Strategy 9 Channel StrategyChannel Selection Market factors Buyer behaviour, buyer needs, willingness of channel intermediaries, location of costumers Producer factors Lack of financial resources, product mix, desired degree of control Product factors Direct distribution Competitive factors Innovative approach, salesforce or producer-owned distribution network, direct marketing Distribution Strategy 10
  6. 6. Channel StrategyDistribution Intensity Intensive Distribution Aims to achieve saturation coverage of the market by using all available outlets Selective Distribution A producer uses a limited number of outlets in a geographical area to sell its products Exclusive Distribution Only one wholesaler, retailer or industrial distributer is used in a geographic area. Distribution Strategy 11 Channel StrategyChannel Integration Conventional marketing channels Hard bargaining and, occasionally, conflict Franchising A producer and channel intermediaries agree each member‘s rights and obligations Channel ownership Total control over distributor activities Distribution Strategy 12
  7. 7. Channel Management Channel management is an effective implementation of the key channel strategy decisions Channel management Managing Selection Motivation Training Evaluation conflict Distribution Strategy 13 Channel ManagementManaging conflictSources of channel conflict Differences in goals Differences in desired product line Multiple distribution channels Inadequacies in performance Distribution Strategy 14
  8. 8. Channel ManagementManaging ConflictAvoiding and resolving conflict Developing a partnership approach Training in conflict handeling Market partitioning Improving performance Channel ownership Coercion Distribution Strategy 15 Physical DistributionDefinition Physical Distribution defined as a set of activities concered with the physical flows with materials, components and finished goods from producer to channel intermediaries and consumers‘ Distribution Strategy 16
  9. 9. Physical Distribution System Distribution Strategy 17 Physical Distribution SystemCustomer Service What level of customer service should be provided?Order Processing How should the orders be handled? Distribution Strategy 18
  10. 10. Physical Distribution SystemInventory Control How much inventory should be held?Warehousing Where should the inventory be located and how many warehouses should be used? Distribution Strategy 19 Physical Distribution SystemTransportation How will the products be transported?Materials handling How will the products be handled during transportation? Distribution Strategy 20
  11. 11. Ethical IssuesSlotting allowancesGrey marketsExclusive dealingRestriction in supply Distribution Strategy 21 Thank you for your attention!
  12. 12. Sources„Principles and Practice of Marketing“ 5thedition, David Jobberwww.wikipedia.org Distribution Strategy 23