This document discusses distribution and distribution channels. It defines distribution as making products available for consumption through direct or indirect means using intermediaries. Distribution plays an important role in the marketing mix by providing locational and time convenience to customers. Physical distribution involves transporting, warehousing, inventory management and order processing. Distribution channels are networks of organizations that make products available to target markets. Common intermediaries are agents, distributors and wholesalers. Distribution strategies include intensive, selective and exclusive distribution depending on product type.

1. MGT 2306
MARKETING MANAGEMENT
Lesson 8

2. LESSON 8 OBJECTIVES
• Define what is Distribution
• Explain the role of distribution in the marketing
mix
• Comprehend the distribution channel functions &
intermediaries
• List and explain the distribution strategy & types
of distribution

3. DISTRIBUTION (PENGEDARAN)
• Distribution is the process of making a product
or service available for use or consumption by a
consumer or business user, using direct means,
or using indirect means through distribution
channels involving intermediaries.

4. THE ROLE OF DISTRIBUTION IN
THE MARKETING MIX
• provides locational
convenience
(kemudahan tempat)
place utility
time utility

5. WHAT DOES PHYSICAL
DISTRIBUTION INVOLVE?
• Transporting
(pengangkutan)
• Warehousing
(pergudangan)
• Inventory
management
(pengurusan
inventori)
• Order processing
(pemprosesan
pesanan)

6. WHAT IS A DISTRIBUTION CHANNEL?
(SALURAN PENGEDARAN)
• A set of interdependent
organisations (producers and
intermediaries) involved in
the process of making a
product or service available
to target markets

7. TYPES OF DISTRIBUTION CHANNELS

8. TRIVIA QUESTION…
How do eggs from the chicken reared in the
chicken farm get to the supermarket where you
buy them?

9. HOW DO EGGS GET FROM THE
CHICKEN TO YOUR TABLE?
• Collected from various chicken farms
• Graded (Categorized : Free-range, low-
cholesterol, Omega 3/6 infused)
• Washed
• Candled (???)
• Graded By weight (A, B, C)
• Packed (primary, secondary, shipping)
• Coded

10. WHAT IS A DISTRIBUTION
INTERMEDIARY?
• Individual or firm (such as an agent, distributor,
wholesaler, retailer) that links producers to other
intermediaries or the ultimate buyer. Distribution
intermediaries help a firm to promote, sell, and
make-available a good or service through
contractual arrangements or purchase and resale
of the item.
• Also called marketing intermediary.

11. WHY USE INTERMEDIARIES?
• lack of distribution facilities and expertise
- high cost of acquiring distribution capability
warehouses, order processing, transportation
etc.)
• specialisation
• contactual efficiency
• achieve economies of scale
• overcome the discrepancy of quantity and
assortment

12. DISTRIBUTION CHANNEL
FUNCTIONS
Contact
Financing
InformationRisk taking
Promotion
MatchingNegotiation
Physical
distribution

13. INFORMATION
• Intermediaries provide information to
manufacturers about the market demands and
changes in regards to products.
• With these valuable information, manufacturers
may adjust their product offerings according to
customer’s demands

14. Intermediaries give information..

15. PROMOTION
• Intermediaries play a role in helping promote the
manufacturer’s products to retailers to persuade
them to take on the product to sell it to their
customers.

16. CONTACT
• Intermediaries know many other
intermediaries and retailers so they can
spread the manufacturer’s products far and
wide in terms of presence and availability

17. MATCHING
• Intermediaries help with bulk-breaking
(pembahagian pukal) and order matching
(pesanan pemadanan) to ensure manufacturers
sell their products and retailers take their
products.

18. NEGOTIATION
• Intermediaries negotiate (runding) prices, quantity
purchased, delivery modes and payment terms
with retailers so that it best maximizes the interest
of their manufacturers and themselves.

19. PHYSICAL DISTRIBUTION
• Intermediaries provide essential transportation
facilities and arrange inter-modal transportation to
ship goods from manufacturers’ factory to
destinations where retailers and wholesalers may
have easy access to them

20. SPIDERMAN DELIVERS PIZZA

21. FINANCING
• Intermediaries come with upfront payments for
transportation, oil, toll and other charges while
shipping goods from manufacturers to retailers.
• Sometimes, they also need to pay deposits or
settle outstanding customs and taxes to the
government before they could take hold of their
stocks.

22. RISK TAKING
• Products which are perishable, fragile,
dangerous and pose risks to people have to be
handled in order to reach the market in good
condition and most of all in a safe manner. The
intermediary bears the risks of unforeseen
events like accidents, hijacking, theft and
spoilage of goods.

23. • A distribution network is established by
answering the questions of who, what, when,
where, and how in terms of getting products to
their end point.
DISTRIBUTION NETWORK
(RANGKAIAN PENGEDARAN)

24. TYPES OF DISTRIBUTION
• Three types of distribution can be used to
make product available to consumers:
(1) intensive distribution,
(2) selective distribution
(3) exclusive distribution.

25. INTENSIVE DISTRIBUTION
• Also known as “one to many” distribution
• The aim is to make available the product in as
many places possible
• Focus on production capability and wide
coverage
• Normally used for fast-moving consumer goods
(FMCG) like food items, drink, snacks,
household items.

27. SELECTIVE DISTRIBUTION
• These are shopping products that require
consumer involvement and also effort to
purchase.
• The coverage is lesser as availability is only
targeted at the location where a large number
of consumers exist and may look for it.
• Goods are normally priced higher
• Examples would be branded shoes, petrol,
pharmaceutical products or middle-range
clothing or electronic equipment.

29. EXCLUSIVE DISTRIBUTION
• These are specialty products which are
sometimes pricey.
• Manufacturer might decide to open their own
stores to sell their own product or control their
distribution by careful selection of outlets or
places to preserve exclusivity & image
• Examples would be golf equipment, pewter
ware, high-end cars, designer equipment like
watches, clothes, shoes etc.

31. CLASS EXERCISE
How are these products distributed?
a) Mandarin Oranges
b) Petrol
c) Ferrari Cars
d) Nike Shoes