 Discuss the evolution of a distribution

strategy
 Determine the factors to consider in
distribution strategy
 Distinguish the different types of distribution
channels
 Explain the different patterns of distribution
CORPORATE
STRATEGY

MARKETING
STRATEGY

DISTRIBUTION
STRATEGY
 CUSTOMER SERVICE LEVELS
 DISTRIBUTION OBJECTIVES
 SET OF ACTIVITIES
 DISTRIBUTION ORGANIZATION
 POLICY AND PROCEDURE
 KEY PERFORMANCE INDICATORS (KPIs)
 CRITICAL SUCCESS FACTORS (CSFs)
 NATURE OF THE INDUSTRY
 PRODUCTS AND SERVICES
 NATURE OF COMPETITION
 AFFORDABILITY

 CATEGORY A- highest contribution

 CATEGORY B
 CATEGORY C- lowest contribution
 What is expected out of the network in
ensuring the desired service levels
 Time
 Place
 Possession
 Period of credit
 Defines the manner in which the company and
its channel go about actioning the objectives
 Periodic sales forecasts
 Dispatch arrangements
 Beat plans for market coverage
 Journey and beat plans for service engineers
 Market visits
 Collection
 Promos
 Sales calls esp. for category A
 Who will do what?
 Own sales team vs. outsourcing
 Selecting the channel partners
 What is expected of the sales personnel?
 Policy and implementation guidelines
 Operating Manual
 Include :
 Redressal of complaints
 Settling disputes
 Additional payments
 Coverage of institutional and service levels
 To measure effectiveness of the
strategy
 Clear, transparent and unambiguous
 Serous commitment
 Fair dealing
 Clear defined customer service policy
 High levels of integrity
 Equitable distribution in times o shortage
 Prompt compensation to channel partners n
special promotional activities
 A GROUP OF PEOPLE AND FIRMS
INVOLVED IN THE TRANSFER OF TITLE OR
OWNERSHIP AS THE PRODUCTS MOVES
FROM THE PRODUCER TO THE CONSUMER
 INTERMEDIARIES OR MIDDLEMEN
BETWEEN THE PRODUCER AND THE
CONSUMER
 SALES CHANNEL
 motivating buyers, sharing information and
negotiating fair bargains
 distributors
 DELIVERY CHANNEL
 Physical transactions
 C&FA
 SERVICE CHANNEL
 After sales service
 Company owned distribution centers (DCs)
 Carrying and Forwarding Agents (C&Fs)
 Consignment Selling Agents (CSAs)
 Distributors, stockists, value added resellers
and agents
 Wholesalers
 Retailers
 Industrial products– own sales force and
marketing team
 Also known as facilitators
 Basically transporters
 Collects product from the company plant and
store them in a central location for breaking
bulk and dispatching to distributors
 CSAs also sell goods to the market
 Company outsourcing of distribution of
products
 Invest in the products except agents
 On commission, margin or mar-ups
 May or may not get credit from company
 Distributors- redistribute
 Stockists- invest but company sells
 Agents- only use their contacts
 Deal with large number of companies
 Own shop in busy trading areas
 They choose and decide what products they
will sell
 Not in contract with the company
 Customers are other wholesalers, retailers
and institutions
 They extend credit terms to their customers
 Shopkeepers

 Value added resellers- buys incomplete

product or kit and sell assembled ones
 Computers, bicycles
 INTENSIVE
 SELECTIVE
 EXCLUSIVE
 PRODUCTS ARE MADE AVAILABLE
IN AS MANY OUTLETS AS
POSSIBLE
 ONLY A FEW SELECT OUTLETS
 IN LINE WITH ITS IMAGE AND VALUE
 JEWELRY
 SIGNATURE ITEMS
 ONLY ONE OUTLET IN A MARKET
 COMPANY OWNED
 PRODUCT PRODUCT

AGENT

INDUSTRIAL
DISTRIBUTOR INDUSTRIAL
DISTRIBUTOR

INDUSTRIAL INDUSTRIAL
CUSTOMER CUSTOMER
 PRODUCER
PRODUCER

DISTRIBUTOR

RETAILER
RETAILER

CUSTOMER CUSTOMER
PRODUCER

DISTRIBUTOR

WHOLESALER

RETAILER

CUSTOMER
1. Why are distribution channels required?
2. Explain the functions of intermediaries.
3. Differentiate distribution center,
distributors, wholesalers and retailers
4. Draw up a distribution strategy for a
company who makes electrical equipment.