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DISTRIBUTION
STRATEGY
Presented by:
SHIRLEY POLIQUIT
M 5:30-8:30 MBAADM5
CHANNEL OF DISTRIBUTION
A distribution

channel (marketing channel) is a
set of independent organizations involved in the...
Distribution Channel (PLACE)
Manufacturer

Retailer

Business
Structure

Distributor

Consumers
MARKETING INTERMEDIARIES
The organizations that the product flows through

on its way to the consumer.
FUNCTIONS PERFORMED BY MARKETING
INTERMEDIARIES
Why are there Marketing
Intermediaries?
Marketing intermediaries allow for the smooth flow of

products and product infor...
Importance of Marketing Channels
Producers

Without intermediaries

16 transactions

Consumers
Channels reduce number of transactions
Producers

Intermediaries
Supermarket

Consumers
Importance of Marketing Channels

...
DISTRIBUTION CHANNEL
FUNCTIONS

Information: gathering and distributing marketing

research and intelligence information ...
Matching: shaping and fitting the offer to the buyer’s needs,

including such activities as manufacturing, grading,
assem...
Direct Channels vs. Indirect

Channels

Marketing channel where there is no intermediary

levels between manufacturer and...
Direct Channel
Retailer
Channel
Producer

Alternative
Channels
of
Distributio
n

Indirect Channels
Wholesaler
Channel

Age...
CHANNEL LEVELS
Exclusive
Distribution
Selective
Distribution
Intensive
Distribution
RETAILING
Retailing includes all the activities in selling products or
services directly to final consumers for their pers...
Non-store retailing includes selling to final consumers
through:
 Direct mail
 Catalogs
 Telephone
 Internet
 TV shop...
TYPES OF RETAILERS
Amount of service
Self-service
Limited service
Full service
Types of Retailers
Product Line
Types of Retailers
Relative Prices
Types of Retailers
Organizational Approach
Types of Retailers
Organizational Approach
Corporate chains are two or more outlets that are commonly
owned and controlled...
Types of Retailers
Organizational Approach
Retailer cooperatives is a group of independent retailers that band
together to...
Types of Retailers
Organizational Approach
Merchandising conglomerates are corporations that
combine several retailing for...
Retailer Marketing Decisions
Segmentation, targeting, differentiation, and
positioning involves the definition and profile...
Retailer Marketing Decisions
Product Assortment and Service
Product assortment and service decisions
include:
 Product as...
Retailer Marketing Decisions
Price Decision
Price policy must fit the target market and
positioning, product and service a...
Retailer Marketing Decisions
Price Decision
High-low pricing involves charging higher prices on an everyday
basis, coupled...
Retailer Marketing Decisions
Promotion Decision
Retailer Marketing Decisions
Place Decision

Central business districts are located in cities and
include department and s...
WHOLESALING
Wholesaling includes all activities involved in
selling goods and services to those buying
for resale or busin...
 Wholesalers are used because they are often better at

performing the following channel functions than other
channel:
Wholesaling
Selling and promoting involves the wholesaler’s sales
force helping the manufacturer reach many smaller
custom...
Wholesaling
Bulk breaking involves the wholesaler buying in larger
quantity and breaking into smaller lots for its custome...
Wholesaling
Transportation involves the wholesaler providing quick
delivery due to its proximity to the buyer
Financing in...
Wholesaling
Risk bearing involves the wholesaler absorbing risk by
taking title and bearing the cost of theft, damage,
spo...
Wholesaling
Management services and advice involves
wholesalers helping retailers train their sales
clerks, improve store ...
TYPES OF WHOLESALERS
Types of
Wholesalers largest group of
Merchant wholesalers is the
wholesalers and include:
Full-service wholesalers who p...
Types of Wholesalers
Brokers and agents do not take title, perform a few
functions, and specialize by product line or cust...
WHOLESALER MARKETING
DECISIONS

Target market and positioning decisions
 Size of customer
 Type of customer
 Need for s...
Wholesaler Marketing Decisions
Marketing mix decisions
 Product
 Price
 Promotion
 Place
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Distribution strategy ppt

  1. 1. DISTRIBUTION STRATEGY Presented by: SHIRLEY POLIQUIT M 5:30-8:30 MBAADM5
  2. 2. CHANNEL OF DISTRIBUTION A distribution channel (marketing channel) is a set of independent organizations involved in the process of making a product or service available to the consumer or business user Used to move the customer towards the product
  3. 3. Distribution Channel (PLACE) Manufacturer Retailer Business Structure Distributor Consumers
  4. 4. MARKETING INTERMEDIARIES The organizations that the product flows through on its way to the consumer.
  5. 5. FUNCTIONS PERFORMED BY MARKETING INTERMEDIARIES
  6. 6. Why are there Marketing Intermediaries? Marketing intermediaries allow for the smooth flow of products and product information from the manufacturer to the consumer. Intermediaries help manufactures distribute their products, and help consumers easily find and obtain the products that they need to buy. Intermediaries reduce the number of contacts necessary in order to make a sale thereby facilitating the marketing process.
  7. 7. Importance of Marketing Channels Producers Without intermediaries 16 transactions Consumers
  8. 8. Channels reduce number of transactions Producers Intermediaries Supermarket Consumers Importance of Marketing Channels With intermediaries 8 transactions
  9. 9. DISTRIBUTION CHANNEL FUNCTIONS Information: gathering and distributing marketing research and intelligence information about the marketing environment Promotion: developing and spreading persuasive communications about an offer Contact: finding and communicating with prospective buyers
  10. 10. Matching: shaping and fitting the offer to the buyer’s needs, including such activities as manufacturing, grading, assembling, and packaging Negotiation: agreeing on price and other terms of the offer so that ownership or possession can be transferred Physical distribution: transporting and storing goods  Financing: acquiring and using funds to cover the costs of channel work Risk taking: assuming financial risks such as the inability to sell inventory at full margin
  11. 11. Direct Channels vs. Indirect Channels Marketing channel where there is no intermediary levels between manufacturer and consumer-- These are known as Direct Channels Some marketing channels are relatively long with many intermediaries -- These are known as Indirect Channels
  12. 12. Direct Channel Retailer Channel Producer Alternative Channels of Distributio n Indirect Channels Wholesaler Channel Agent/Broker Channel Producer Producer Producer Agents or Brokers Wholesalers Retailers or Distributor Consumers or User Wholesalers Retailers or Distributor Retailers or Distributor Consumers or User Consumers or User Consumers or User
  13. 13. CHANNEL LEVELS Exclusive Distribution Selective Distribution Intensive Distribution
  14. 14. RETAILING Retailing includes all the activities in selling products or services directly to final consumers for their personal, non-business use Retailers are businesses whose sales come primarily from retailing *Retailing can be done in stores (store retailing) or out of a store (non-store)
  15. 15. Non-store retailing includes selling to final consumers through:  Direct mail  Catalogs  Telephone  Internet  TV shopping  Home and office parties  Door-to-door sales  Vending machines
  16. 16. TYPES OF RETAILERS Amount of service Self-service Limited service Full service
  17. 17. Types of Retailers Product Line
  18. 18. Types of Retailers Relative Prices
  19. 19. Types of Retailers Organizational Approach
  20. 20. Types of Retailers Organizational Approach Corporate chains are two or more outlets that are commonly owned and controlled  Size allows them to buy in large quantities at lower prices and gain promotional economies Voluntary chains are wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising
  21. 21. Types of Retailers Organizational Approach Retailer cooperatives is a group of independent retailers that band together to set up a joint-owned, central wholesale operation and conduct joint merchandising and promotion effort  Ace Hardware Franchise organizations are based on some unique product or service; on a method of doing business; or on the trade name, good will, or patent that the franchisor has developed
  22. 22. Types of Retailers Organizational Approach Merchandising conglomerates are corporations that combine several retailing forms under central ownership
  23. 23. Retailer Marketing Decisions Segmentation, targeting, differentiation, and positioning involves the definition and profile of the market so the other retail marketing decisions can be made
  24. 24. Retailer Marketing Decisions Product Assortment and Service Product assortment and service decisions include:  Product assortment  Services mix  Store atmosphere
  25. 25. Retailer Marketing Decisions Price Decision Price policy must fit the target market and positioning, product and service assortment, and competition  High markup on lower volume  Low markup on higher volume
  26. 26. Retailer Marketing Decisions Price Decision High-low pricing involves charging higher prices on an everyday basis, coupled with frequent sales and other price promotions Everyday low price (EDLP) involves charging constant, everyday low prices with few sales or discounts
  27. 27. Retailer Marketing Decisions Promotion Decision
  28. 28. Retailer Marketing Decisions Place Decision Central business districts are located in cities and include department and specialty stores, banks, and movie theaters Shopping center is a group of retail businesses planned, developed, owned, and managed as a unit  Regional shopping centers  Community shopping centers  Neighborhood shopping centers  Power center  Lifestyle centers
  29. 29. WHOLESALING Wholesaling includes all activities involved in selling goods and services to those buying for resale or business use
  30. 30.  Wholesalers are used because they are often better at performing the following channel functions than other channel:
  31. 31. Wholesaling Selling and promoting involves the wholesaler’s sales force helping the manufacturer reach many smaller customers at lower cost Buying assortment building involves the selection of items and building of assortments needed by their customers, saving the customers work
  32. 32. Wholesaling Bulk breaking involves the wholesaler buying in larger quantity and breaking into smaller lots for its customers Warehousing involves the wholesaler holding inventory, reducing its customers’ inventory cost and risk
  33. 33. Wholesaling Transportation involves the wholesaler providing quick delivery due to its proximity to the buyer Financing involves the wholesaler providing credit and financing suppliers by ordering earlier and paying on time
  34. 34. Wholesaling Risk bearing involves the wholesaler absorbing risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence Market information involves the wholesaler providing information to suppliers and customers about competitors, new products, and price developments
  35. 35. Wholesaling Management services and advice involves wholesalers helping retailers train their sales clerks, improve store layouts, and set up accounting and inventory control systems
  36. 36. TYPES OF WHOLESALERS
  37. 37. Types of Wholesalers largest group of Merchant wholesalers is the wholesalers and include: Full-service wholesalers who provide a full set of services Limited service wholesalers who provide few services and specialized functions
  38. 38. Types of Wholesalers Brokers and agents do not take title, perform a few functions, and specialize by product line or customer type  Brokers bring buyers and sellers together and assist in negotiations  Agents represent buyers or sellers Manufacturers’ sales branches and offices is a form of wholesaling by sellers or buyers themselves rather than through independent wholesalers
  39. 39. WHOLESALER MARKETING DECISIONS Target market and positioning decisions  Size of customer  Type of customer  Need for service
  40. 40. Wholesaler Marketing Decisions Marketing mix decisions  Product  Price  Promotion  Place

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