Marketing

Management S6:

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Distribution
 Learning Objectives

o Explain how companies use marketing channels in delivering values

o Identify channel design decisions

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o Discuss the importance of marketing logistics and supply chain management
o Understand place decisions as part of the marketing mix

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 Wooclap!

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 Session Plan - Content

Introduction to Segmentation,
01 marketing 02 Market Analysis 03 Targeting and
Positioning

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Product &
04 Branding 05 Price 06 Distribution 07 Communication

Student Application of theory from all sessions

08 and 09 Presentations In groups for your capstone project

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Business Challenge:
You are the owner of a small boutique
brand in your local area but you think

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that your products could have more
potential if more consumers could
access them.

What opportunities do you have to

make your products more accessible to
more customers?

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 Product Journey Student Exercise

Take 10 minutes to complete the following:

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Where do your clothes come from? Trace the
journey of a clothing product from fabrication to
customer acquisition.

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Zara’s Product Journey from Concept to Customer

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Final Customer

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 Distribution

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 Marketing/Distribution Channels
Supply Chain: A set of interdependent organisations that help make a product or service available for use or
consumption by the customer (B2C) or business user (B2B)

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Intermediaries: pass goods along the supply chain e.g. distribution centers, logistics partners
Resellers: buy and sell goods to other businesses (e.g. Wholesalers)
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Kotler and Armstrong (2021) Principles of Marketing p.344; Masterson et al (2017) Marketing: An introduction. p.345
How a distributor intermediary Adds Value

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Kotler and Armstrong (2021) Principles of Marketing p.346
 The role of Intermediaries

Country of
origin

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Retailers

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How a distributor intermediary Adds Value

Information Gather information and distribute information about consumers

and producers. eg. customer research agency, Salesforce CRM
system

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Promotion Developing and communicating offers e.g. Designers, Promotion
agencies
Contact Finding and engaging customers and prospective buyers e.g.
brokers, wholesalers
Matching Shaping offers to meet buyers' needs, including activities such as
manufacturing, grading, assembling and packaging eg.
Manufacturing factories
Negotiation Reaching an agreement on price e.g. buyers, brokers

Physical Transporting and storing goods e.g. logistics companies

Distribution

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Kotler and Armstrong (2021) Principles of Marketing p.346
 Channel Systems

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Eg. Pick-your-own, Eg. La Redoute source Eg. Knorr products sell to
farmers market furniture from the wholesaler, who sell to Carrefour
manufacturer and sell and the end consumer
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to the end consumer Kotler and Armstrong (2021) Principles of Marketing p.347
Multiple channel Distribution Systems

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Large retailers Vending machines
where customers in airports and train
High street stores Universities Retailers targeting stations for
do their family
targeting mass targeting students coffee enthusiasts shop customers who are
market who want to drink travelling
at home

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Multiple channel Distribution System
Multiple Channel Distribution Systems: occur when a single firm uses two or more distribution channels to
reach its target customers

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Kotler and Armstrong (2021) Principles of Marketing p.352
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Channel Management Decisions

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Channel Management Decisions

1 Analyse customer needs

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2 Evaluate new Channel
Alternatives

3 Assess the sustainability

of the channel system

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Kotler and Armstrong (2021) Principles of Marketing
 1 Analyse Customer Needs:
How do customers want to access products or
services today?

Search Purchase Aftersales

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73% of customers use multiple channels to
shop over the purchase journey.

Customer’s cross channels

• Search online, collect in-store (click and
collect)
• Purchase in-store, delivery at home
• Use mobile in-store, scan QR code for more
Marketing channels: Mobile, store,
information
website, catalogue, telephone
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https://hbr.org/2017/01/a-study-of-46000-shoppers-shows-that-omnichannel-retailing-works
 1 Analyse Customer Needs:
Shopping Experience

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Castorama opens city
centre stores with no
parking facilities

Hyundai Car showroom in Westfield shopping Are Primark

centre (mall), London considering
opening an
online shop?
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2 Evaluate new Channel Alternatives
Types of Number of
Intermediary intermediaries
Choice of intermediary can
Controlling the number of
affect brand image, entry intermediaries through
to market and prices.
Exclusive distribution:
limiting the number of
Eg. Redbull decided to intermediaries to maintain
start selling through control over the service
students sales level.
representatives before
selling through retailers. Intensive distribution:
places products in as
many outlets as possible.
Kotler et al (2019) Marketing Management, p.639
Terms and
responsibilities of
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intermediaries
Setting up a price policy
(eg. Fairtrade), conditions
of sale (eg. Price discounts
for early payment), mutual
responsibilities and
services (eg. Superior
service agreement, brand
image)
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 2 Evaluate new Channel Alternatives
• Each new channel should be assessed Primark: Would the
verses the value that they offer cost of opening an
online shop mean that
prices would rise to

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• Firms will try to align customers and those of nearest
channels to maximise demand at the competitors? What
lowest overall cost. value would be
added?

• Sellers try to replace high-cost

Celio: closed 102 in
channels with low-cost channels as
France in 2021 due to
long as the value added per sale is economic losses and
sufficient and aligns with customer lack of justification of
needs and profitability. value, following
pandemic

https://www.bfmtv.com/economie/que-
restera-t-il-du-pret-a-porter-francais-apres-
le-confinement_AN-202011140036.html

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Kotler et al (2019) Marketing Management, p.639
3 Assess the sustainability of the
channel system

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https://youtu.be/KSa8pANLX3s

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 3 Assess the sustainability of the
channel system
• Companies have 2 main reasons for
reducing the environmental impact of
their supply chain.

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1. Environmental sustainability impact
has become an important factor in
supplier selection and performance
evaluation.

2. Having a green supply chain can save

a company money. Logistics,
warehousing and packaging can be
costly. More efficient supply chains =
greater profitability.

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Kotler and Armstrong (2021) Principles of Marketing, p. 363
 Capstone Application

6 Distribution Task 6.1 Make channel management decisions

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