Distribution Strategy


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  • e.g. My Fashion, 7-Eleven, McDonalds
  • South Koreans and HongKongers have the highest click-rate for ad-banners
  • Distribution Strategy

    1. 1. Group Member:-Group Member:- Ritwik SharmaRitwik Sharma Himanshu PandeyHimanshu Pandey RajShekhar GantiRajShekhar Ganti Jithish NambiarJithish Nambiar 1
    2. 2. “Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption” Philip Kotler 2
    3. 3.  A plan created by the management of a manufacturing business that specifies how the firm intends to transfer its products to intermediaries, retailers and end consumers.  Larger companies involved in making products will usually also put together a detailed production distribution strategy to guide its entry into its intended market. 3
    4. 4. 4 Manufacturers/products Agents/brokers Wholesalers/distributors RetailersRetailers Consumers and organizational end users
    5. 5. 5
    6. 6.  Exclusive Distribution ◦ Limiting the distribution to only one intermediary in the territory  Intensive distribution ◦ Distribute from as many outlets as possible to provide location convenience  Selective distribution ◦ Appoint several but not all retailers 6
    7. 7.  It is a situation where suppliers and distributors enter into an exclusive agreement that only allows the named distributor to sell a specific product  Means that the producer selects only very few intermediaries.  Exclusive distribution is often characterised by exclusive dealing where the reseller carries only that producer's products to the exclusion of all others 7
    8. 8.  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 8
    9. 9.  Betting on one dealer in each market  Only suitable for high price, high margin, and low volume products 9
    10. 10.  The producer's products are stocked in the majority of outlets  It is a strategy under which a company sells its product through as many outlets as possible so that the customers encounter the product virtually everywhere they go 10
    11. 11.  Advantages: ◦ Increased sales, wider customer recognition, and impulse buying  Disadvantages: ◦ Characteristically low price and low-margin products that require a fast turnover ◦ Difficult to control large number of retailers 11
    12. 12.  Newspapers, soft drinks  Most of the fast moving consumer goods 12
    13. 13.  Selective Distribution is a type of distribution that lies between intensive and exclusive distribution.  This basically involves using more than one, but lesser than all the intermediaries who carry the company’s products 13
    14. 14.  Advantages: ◦ Better market coverage than exclusive distribution ◦ More control and less cost than intensive distribution ◦ Concentrate effort on few productive outlets ◦ Selected firms capable of carrying full product line and provide the required service 14
    15. 15.  Disadvantages: ◦ May not cover the market adequately ◦ Difficult to select dealers (retailers) that can match your requirement and goals 15
    16. 16. Using two or more different channels to distribute goods and services  Why? ◦ Permits optimal access to each market segment ◦ Increase market coverage, lower channel cost and provide more customized selling  What to look out for? ◦ More channels usually means more conflict and control problems 16
    17. 17. Each channel handles a product or segment that is different or non-competing e.g.  Toyota Lexus  MPH online portals  Magazine distributions
    18. 18. The same product is sold through two different and competing channels e.g. ◦ Non-prescriptive drugs ◦ Electronic goods  Why? To increase sales  What to look out for? ◦ Over extending yourself ◦ Dealers’ resentment ◦ Control problems 18
    19. 19. Modify when the following changes occur:  Consumer markets and buying habits  Customer needs  Competitor’s perspectives  Relative importance of outlet types  Manufacturer’s financial strength  Sales volume level of existing products, and  The marketing mix 19
    20. 20.  One of the importance of any website or business is to bring the products or services to the right people and to reach the target audience.  There are a number of different distribution channels available on the Internet which could be utilised efficiently to the benefits of any company 20
    21. 21. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Selecting Channels of DistributionSelecting Channels of Distribution  In either the presence or the absence of a traditional channel, a primary constraint is that of the availability of various types of middlemen  Selecting a channel of distribution can hinge on one of these factors  Distribution coverage required  Degree of control desired  Total distribution cost  Channel flexibility
    22. 22. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Selecting Channels of DistributionSelecting Channels of Distribution  Distribution coverage – Channel selection may depend upon the nature of market coverage desired  Intensive distribution – Using as many wholesalers and retailers as possible  Selective distribution – Using only the best available per geographic area  Exclusive distribution – Selected intermediaries are given exclusive rights within a particular territory
    23. 23. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Selecting Channels of DistributionSelecting Channels of Distribution  Degree of control desired – Achieved by the seller is proportionate to the directness of channel  Total distribution cost – Channel should be viewed as a total system composed of interdependent subsystems  Objective should be to optimize total system performance  Generally assumed that the total system should be designed to minimize costs, other things being equal  Channel flexibility – Ability of the manufacturer to adapt to changing conditions
    24. 24. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Thank YouThank You