1. Chapter 12
Distribution
and Supply Chain Management

2. Distribution
-the movement of goods and services
from the source through a distribution
channel, right up to the final customer,
consumer, or user, and the movement of
payment in the opposite direction, right
up to the original producer or supplier.

3. Supply chain management
-requires the commitment of supply
chain partners to work closely to
coordinate order generation, order
taking, and order fulfillment. They
thereby create an extended enterprise
spreading far beyond the producer's
location.

4. Major issues:
1. Selecting a distribution system
2. Establishing channel of distribution
3. Managing the supply chain
4. Overseeing the physical distribution of
products

5. Selecting a Distribution
System
THREE LEVELS:
1. Intensive distribution system
2. Exclusive distribution system
3. Selective distribution system

6. Intensive distribution system
- The product is made
available to consumers in
as many places as possible
will be chosen.

7. Exclusive distribution system
- Limits the number of distributors to
only one or two in each geographic area.

8. Selective distribution system
- Means that carefully chosen set of
outlets carries the product to give the
manufacturer better control over the
marketing channel.

9. Decision variables in selecting
level of distribution
Type of product
Price
Degree and type of Competition
Brand’s image
Desired product position
Level of brand equity
Image of the distributors

10. Establishing Channels of
Distribution
Channels of Distribution
-the paths goods and services take from
the producer to the end user.

11. Different channels
Direct channels
Indirect channels
Dual channels

12. Direct channel
When a producer sends a product
directly to the consumer or end user

13. Indirect channel
-Utilizes intermediaries including:
a. Retailers
b. Wholesalers
c. Distributors
d. Industrial agent
e. Industrial merchants

14. Dual channels
-presents when a manufacturer sells
directly to major retail outlets and
employs wholesalers to reach smaller
retailers
-known as multichannel distribution
system or hybrid marketing system

15. Advantages of
intermediaries
1) Reach a wider number of customers
2) provide a wider assortment of
products to retailers and customers
3) Provide convenience to customers
4) Reduce total cost of distribution
5) Share marketing functions

16. Primary disadvantages of
intermediaries
 Time
 Cost
 Loss of control

17. Distribution system in
international settings:
 Distribution,warehousing ,credit terms
and shipping sytems will be different.
 The types of companies serving as
intermediaries also vary.
 Before expanding into this,mktg.team
carefully analyzes the types of
distribution channels are available and
which ones will be favored by
companies and customers in other
countries.

18. Thank you!
Prepared by:
Guevarra, Xairene Mae C.
BSBA4 -MM