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• it is how your product is bought and where it is bought. This movement could be through
a combination of intermediaries such as distributors, wholesalers and retailers. In
addition, a newer method is the internet which itself is a marketplace now.
• It seeks to the answer of how best to move products from producers to consumer.
• Distribution 3 key objectives
• Effectively reach your target market
• To minimize cost of dissemination
• Maintain availibiity
DISTRIBUTION CHANNEL

• A distribution channel can be defined as the activities and processes required to move a
product from the producer to the consumer. Also included in the channel are the
intermediaries that are involved in this movement in any capacity. These intermediaries
are third party companies that act as wholesalers, transporters, retailers and provide
warehouse facilities.
FUNCTIONS PERFORMED BY CHANNEL MEMBER

• Physical Distribution – The transport and storage of goods

• Matching– Making available the assortment of goods and service desired by the customer
• Time & Place – Making them available at the time and in the place desired by customer
• Financing – Financing all the expenses
• Transferring tittle – Ensuring that legal ownership is passed
• Risk Taking – Bearing a part of risk
• Promotion – Persuading potential buyers
• Service – Pre and post sales services
TYPES OF DISTRIBUTION CHANNELS

• four main types of distribution channels

• Direct
• Indirect
• Dual Distribution
• Reverse Channels
DIRECT

• In this channel, the manufacturer directly provides the product to the consumer. In this
instance, the business may own all elements of its distribution channel or sell through a
specific retail location. Internet sales and one on one meetings are also ways to sell
directly to the consumer. One benefit of this method is that the company has complete
control over the product, its image at all stages and the user experience.
INDIRECT

• In this channel, a company will use an intermediary to sell a product to the consumer. The
company may sell to a wholesaler who further distributes to retail outlets. This may raise
product costs since each intermediary will get their percentage of the profits. This channel
may become necessary for large producers who sell through hundreds of small retailers.
DUAL DISTRIBUTION

• In this type of channel, a company may use a combination of direct and indirect selling.
The product may be sold directly to a consumer, while in other cases it may be sold
through intermediaries. This type of channel may help reach more consumers but there
may be the danger of channel conflict. The user experience may vary and an inconsistent
image for the product and a related service may begin to take hold.
REVERSE CHANNELS

• The last, most non tradition channel allows for the consumer to send a product to the
producer. This reverse flow is what distinguishes this method from the others. An
example of this is when a consumer recycles and makes money from this activity.
• Mostly used for defective items or returns
DISTRIBUTION CHANNEL INTERMEDIARIES

• are middlemen who play a crucial role in the distribution process. These middlemen
facilitate the distribution process through their experience and expertise.
• There are four main types of intermediaries:
• Agents
• Wholesalers
• Distributors
• Retailers
AGENT

• The agent is an independent entity who acts as an extension of the producer by

representing them to the user. An agent never actually gains ownership of the product and
usually make money from commissions and fees paid for their services.
WHOLESALERS

• Wholesalers are also independent entities. But they actually purchase goods from a
producer in bulk and store them in warehouses. These goods are then resold in smaller
amounts at a profit. Wholesalers seldom sell directly to an end user. Their customers are
usually another intermediary such as a retailer.
DISTRIBUTORS

• Similar to wholesalers, distributors differ in one regard. A wholesaler may carry a variety
of competition brands and product types. A distributor however, will only carry products
from a single brand or company. A distributor may have a close relationship with the
producer.
RETAILERS

• Wholesalers and distributors will sell the products that they have acquired to the retailer
at a profit. Retailers will then stock the goods and sell them to the ultimate end user at a
profit.
CHANNEL LEVELS:

• Each layer of distribution intermediaries that performs some work in bringing the
product to its final consumer is a channel level.
• Zero Level Channel
• One Level Channel
• Two Level Channel
• Three Level Channel
ZERO LEVEL CHANNEL

• A zero level channel, commonly known as direct marketing channel has no intermediary
levels. In this channel framework manufacturer sells merchandise directly to customers.
An example of a zero level channel would be a factory outlet store. Many service
providers like holiday companies, also market direct to consumers, bypassing a
traditional retail intermediary – the travel agent.
ONE LEVEL CHANNEL:

• A one level channel contains one selling intermediary. In consumer markets, this
is usually a retailer. The consumer electrical goods market in the United Kingdom
is typical of this arrangement whereby producers such as Sony, Panasonic, Canon
etc. sell their goods directly to large retailers such as Comet, Dixons and Currys
which then sell the goods to the final consumers.
TWO LEVEL CHANNEL

• A two level channel encompasses two intermediary levels – a wholesaler and a

retailer. A wholesaler typically buys and stores large quantities of merchandise
from various manufacturers and then breaks into the bulk deliveries to supply
retailers with smaller quantities. For small retailers with limited financial
resources and order quantities, the use of wholesalers makes economic sense.
 THREE LEVEL CHANNEL

• A third level channel, as the name implies, encompasses three

intermediary levels – a wholesaler, a retailer and a jobber. In the poultry
industry, products like mutton, chicken, eggs etc. are first sold to
wholesalers; he then sells it to jobbers, who sell to small and unorganized
retailers.
• Jobber: a wholesaler who operates on a small scale or who sells only to
retailers and institutions
DISTRIBUTION STRATEGIES

• Three main strategies that can be used are

• Intensive Distribution
• Selective Distribution
• Exclusive Distribution
INTENSIVE DISTRIBUTION

• This strategy may be used to distribute lower prices products that may be impulse
purchases. Items are stocked at a large number of outlets and may include things such as
mints, gum or candy as well as basic supplies and necessities.
SELECTIVE DISTRIBUTION

• In this strategy, a product may be sold at a selective number or outlets. These may include
items such as computers or household appliances that are costly but need to be somewhat
widely available to allow a consumer to compare.
EXCLUSIVE DISTRIBUTION

• A higher priced item may be sold at a single outlet. This is exclusive distribution. Cars
may be an example of this type of strategy.
THE PROMOTIONAL
STRATEGY
MAJOR TYPES OF ADVERTISING

• Institutional advertising
• to establish, change or maintain the firm’s identity - not an
attempt to sell anything
• Product advertising
• pioneering advertising
• stimulate demand for a new product: primary demand
• competitive advertising
• attempts to increase sales: brand loyalty
• comparative advertising
• directly or indirectly compares two brands
SETTING ADVERTISING OBJECTIVES

Introduce New Products

Position Brands

Obtain Outlets

Ongoing Contact

Strategy Support Sales Force

Decisions
in Setting
Get Immediate Action
Advertising
Objectives
Maintain Relationships
ADJUST YOUR ADVERTISING

• One way to reduce the risk involved in an expensive advertising campaign

is to conduct a consumer pretest.
• consumer pretest
• a procedure in which a panel of consumers evaluates an ad before its release
REVISING THE PROMOTION STRATEGY

• Conduct a formal review of your promotion strategy on a regular basis.

 
• Use your sales forecast to arrive at a promotional budget to support that
level of sales.

• Then revise your promotional mix promotion plan.

AIDA MODEL

• The AIDA Model, which stands for Attention, Interest, Desire,

and Action model, is an advertising effect model that identifies
the stages that an individual goes through during the process of
purchasing a product or service. The AIDA model is commonly
used in digital marketing, sales strategies, and public relations
campaigns.
THE STEPS INVOLVED IN AN AIDA MODEL ARE:

• Attention: The first step in marketing or advertising is to

consider how to attract the attention of consumers.
• Interest: Once the consumer is aware that the product or service
exists, the business must work on increasing the potential
customer’s interest level.
For example, Disney boosts interest in upcoming tours by
announcing stars who will be performing on the tours.
THE STEPS INVOLVED IN AN AIDA MODEL ARE:

• Desire: After the consumer is interested in the product or

service, then the goal is to make consumers desire it, moving
their mindset from “I like it” to “I want it.”

• Action: The ultimate goal is to drive the receiver of the

marketing campaign to initiate action and purchase the product
or service.
FIRST STEP: ATTENTION

• Often, the attention part is overlooked by many

marketers. It is assumed that the product or service
already got the attention of the consumers – which
may or may not be the case. In any event, don’t just
assume that everyone is already aware of your
product.
ATTENTION: THIS CAN BE DONE IN SEVERAL
WAYS:
• Placing advertisements in unexpected situations or locations. This
is often referred to as guerrilla marketing.
• Creating shock in advertisements through provocative imagery.
• An intensely targeted message. This is also referred to as
personalization.
• Essentially, the goal is to make consumers aware that a product or
service exists
SECOND STEP: INTEREST

• Creating interest is generally the hardest part. For example, if the product or
service is not inherently interesting, this can be very difficult to achieve. Make
sure that advertising information is broken up and easy to read, with
interesting subheadings and illustrations. Focus on what is most relevant for
your target market in relation to your product or service, and on conveying
only the most important message you want to communicate to consumers.

• A good example of this is Wendy’s “Where’s the beef?” ad campaign that

focused on the fact that Wendy’s hamburgers contained more beef than their
competitors’ hamburgers.
THIRD STEP: DESIRE

• The second and third steps of the AIDA model go together. As you are
hopefully building interest in a product or service, it is important that you
help customers realize why they “need” this product or service. Think about
how the content in infomercials is presented – they aim to provide interesting
information on the product, along with the benefits of buying it – benefits
that ideally make consumers want the product more and more. Infomercials
do this extremely well by showing the product being used in several creative
situations. Convey to the audience the value of the product or service, and
why they need it in their life.
FOURTH STEP: ACTION

• The last step of the AIDA model is getting your consumer to initiate
action. The advertisement should end with a call to action – a
statement that is designed to get an immediate response from the
consumer. For example, Netflix uses persuasive text to convince the
consumer to try their free trial. Netflix communicates how convenient
their product is and highlights its value, then urges consumers to sign
up for a free trial