Distribution

Strategy
GROUP 5:
DOFILEZ, RJAHYA
BARRIOS, JAY-R
BALEÑA, PETER
MINOWA, ERIKA
WHAT IS DISTRIBUTION STRATEGY?

 A plan created by the management of a manufacturing

business that specifies how the firm intends to transfer its
product to intermediaries , retailers and end consumers.
HOW CHANNEL MEMBERS ADD
VALUE?
 Intermediaries offer producers greater efficiency in
making goods available to target markets. Through their
contracts, experience, specialization and scale of
operations, intermediaries usually offer the firm more
than it can achieve on its own,
CHANNEL OF DISTRIBUTION
 A Distribution Channel (Marketing Channel)
- is the path or route decided by the company to deliver its good or
service to the customers. The route can be as short as a direct
interaction between the company and the customer or can include
several interconnected intermediaries like wholesalers, distributors,
retailers, etc.
MARKETING INTERMEDIARIES
 The organizations that the product flow through on its way to
consumer.
WHY ARE THERE MARKETING
INTERMEDIARIES
 Allow for the smooth flow of products and product
information from the manufacturer to consumer
 Intermediaries help manufactures distribute their
products and help consumers easily find and obtain the
products that they need to buy.
DISTRIBUTION CHANNEL FUNCTIONS
 INFORMATION : gathering and distributing marketing research and
intelligence information about the marketing environment.
 PROMOTION : developing and spreading persuasive
communication about an offer
 CONTACT : finding and communicating with prospective buyers
 MATCHING : shaping and fitting the offer to the buyer’s needs,
including such activities as manufacturing , grading , assembling ,
and packaging.
 NEGOTIATION : agreeing on price and other terms of the offer so
that ownership or possession can be transferred
 PHYSICAL DISTRIBUTION : transporting and storing goods
 FINANCING : acquiring and using funds to cover the costs of
channel work
 RISK TAKING : assuming financial risk such as the inability to sell
inventory at full margin
CHANNEL BEHAVIOR
 VERTICAL MARKETING SYSTEMS are professionally managed and
centrally programmed networks designed to achieve operating
economies and maximum market impact, from points of production
to end users
 Sometimes called “centrally coordinated systems”
 Types of Vertical Marketing Systems:
Corporate VMS
Contractual VMS
Administered VMS
 HORIZONTAL MARKETING SYSTEMS two or more companies join
together to adopt a new marketing strategy. They can combine
their financial, production, resources to accomplish their target.

 MULTICHANNEL DISTRIBUTION SYSTEMS a distribution system in which

two or more marketing channels set up a single firm to one or more
customer segments.
 Distribution systems encompass every aspect of getting your
product to your customer.
Types of Distribution System:
Direct Sales
Whole Sales
Distributorship Sales
Products vs. Services
MARKETING LOGISTICS
 Involve planning, delivering and controlling the flow of physical
goods, marketing materials and information from the producer to
the market. The aim is to meet customer demands while still making
a satisfactory profit. To maintain your competitive edge, you need
to create an effective strategy regarding product, price, place and
promotion.
 Four functions of marketing logistics:
Product Delivery
Price
Promotion
Place
RETAILING
 RETAILING
- includes all the activities in selling products of services directly to final
consumers for their personal , non-business use.

 RETAILERS
- are businesses whose sales come primarily from retailing

*Retailing can be done in stores (store retailing) or out of a store (non-

store)
 Non – store retailing includes selling to final consumers through:
- Direct mail
- Catalogs
- Telephone
- Internet
- TV shopping
- Home and office parties
- Door-to-door sales
- Vending machines
TYPES OF RETAILERS

 Amount of service
SELF SERVICE
LIMITED SERVICE
FULL SERVICE
WHOLESALING
 WHOLESALING
- includes all activities involved in selling goods and services to those
buying for resale or business use

 Wholesalers are used because they are often better at performing

the following channel functions than other channel:
TYPES OF WHOLESALERS
MERCHANT WHOLESALERS

AGENTS AND BROKERS

MANUFACTURERS’ SALES BRANCHES AND OFFICES

TYPES OF WHOLESALERS
 Merchant wholesalers is the largest group of wholesalers and
include:
•Full-service wholesalers who provide a full set of services
•Limited service wholesalers who provide few services and specialized
functions.

 Brokers and agents do not take title, perform a few functions and
specialize by product line or costumer type.
Broker bring buyers and sellers together and assist in negotiations
Agents represent buyers and sellers

 Manufacturers’ sales branches and offices is a form of wholesaling

by sellers or buyers themselves rather than through independent
wholesalers
Wholesaler marketing decisions

 Target market and positioning decisions

• Size of costumer
• Type of costumer
• Need for service