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Distribution strategy
- 1. Distribution Strategy Peter Angele Ileana Szczepanski Niklas Reissinger Overview Definition Distribution Channels Channel Strategy Channel Management Physical Distribution Physical Distribution System Ethical Issues Distribution Strategy 2
- 2. Definition Distribution is one of the four aspects of marketing. A distributor is the middleman between the manufacturer and retailer. After a product is manufactured it is typically shipped (and usually sold) to a distributor. The distributor then sells the product to retailers or customers Distribution Strategy 3 Distribution Channels To reconcile the needs of producers and consumers To improve efficiency by reducing the number of transactions and creating bulk To improve accessibility by lowering location and time gaps between producers and consumers To improve specialist services to customers Distribution Strategy 4
- 3. How a channel intermediary increases distribution efficiciency Distribution Strategy 5 Distribution Channels Consumer Channels Distribution Strategy 6
- 4. Distribution Channels B2B Channels Distribution Strategy 7 Distribution Channels Services Channels Distribution Strategy 8
- 5. Channel Strategy Channel 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 Strategy Channel 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. Channel Strategy Distribution 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 Strategy Channel 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. 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 Management Managing conflict Sources of channel conflict Differences in goals Differences in desired product line Multiple distribution channels Inadequacies in performance Distribution Strategy 14
- 8. Channel Management Managing Conflict Avoiding and resolving conflict Developing a partnership approach Training in conflict handeling Market partitioning Improving performance Channel ownership Coercion Distribution Strategy 15 Physical Distribution Definition 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. Physical Distribution System Distribution Strategy 17 Physical Distribution System Customer Service What level of customer service should be provided? Order Processing How should the orders be handled? Distribution Strategy 18
- 10. Physical Distribution System Inventory 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 System Transportation How will the products be transported? Materials handling How will the products be handled during transportation? Distribution Strategy 20
- 11. Ethical Issues Slotting allowances Grey markets Exclusive dealing Restriction in supply Distribution Strategy 21 Thank you for your attention!
- 12. Sources „Principles and Practice of Marketing“ 5th edition, David Jobber www.wikipedia.org Distribution Strategy 23