Distribution Strategy

What are Distribution Channels and Supply Chain

Logistics and Why do we use them?

Distribution Channel
- Is a network of firms that are interconnected in
their quest to provide sellers a means of infusing
the marketplace with their goods, and buyers a
means of purchasing those goods, doing it all as
efficiently and profitably as possible.
 Steps in  Specifying the Role of the Distributors
Designing the  Selecting the Type of Marketing Channel
 Determining the Intensity of Distribution
Channel of  Selecting the Distribution Members

Distribution
 1. Distributing Consumer Goods
a. Producer to Consumer
b. Producer to Distributors then Consumer

Major c.

d.
Producer to Distributor to Retailer and then the Consumer
Producer to Agent Distributor to Retailer and Eventually the
Consumer

Channels of 2. Distribution of Business Goods

a. Producer to Users

Distribution b.

c.
Producer to Industrial Distributors then to Users
Producer to Agent then the Consumers
d. Producer to Agent to Industrial Distributor and then the
Consumers
3. Distribution of Services
a. Producer to the Consumers
b. Producer to Agent then Customers
 1. Market Consideration
The type of Product
Factors
a.

b. Number of Potential Customers

c. Geographic Concentration

Affecting the d. The Volume of Orders

2. Product Consideration
Channel of a. Unit Value
b. Perishability

Distribution c. Technical Nature of the Product

3. Consideration in the Choice of the Middleman
a. The Service of the Middlemen
b. Availability of the Desirable Middlemen
c. Attitudes of the Middlemen about the Producers’
Policies and Producer
Determining the
Intensity of 1. Intensive Distribution System
2. Selective Distribution System
Product 3. Exclusive Distribution System

Distribution
 1. Personal Selling

Promotional 2.
3.
Advertising
Sales Promotion

Methods 4.
5.
Public Relation
Publicity
  Connected chain of all business
Supply Chain entity, both internal and external to
the Company

Logistic  Involves the tasks of planning,

implementing and controlling the
physical flow of materials and final
goods.
Supply Chain
Management  A management system that
coordinates and integrates all of the
activities.
How to Design Smart Distribution System:
Intensive or Selective?

 Intensity of Distribution
- A function of consumer convenience in
access, information search

 Extensiveness of Distribution
- Related to the brand’s life cycle or the
company’s maturity in the marketplace.
Push
Push vs Pull Strategies
Manufacturer HOW TO PUSH?
-Advertise to partners (and consumers) - Price Discounts - Incentives for sales force
Wholesaler - Distribute more selectively - Quantity Discounts - Financing
- Employ sales force - Allowances for Marketing Activities
Retailer - Usually more complicated selling, more expensive stuff

HOW TO PULL?
Consumer
- Advertise to Consumers - Quantity Discount - Upgrades
Pull - Distribute Widely - Larger Package - Coupons
- No sales force - Inexpensive Trial - Rebates
- Usually selling small simple stuff - Free Sample - Financing
- Price discount - Bundled Product Sample - Loyalty Points