DISTRIBUTION STRATEGIES

Presented by:
Amerah Fatmah M Ismael
Rosnia G Gampong
Introduction
Distribution strategy involves coming up with an efficient method of
disseminating your company’s products or services. The goal of this
type of strategy is to maximize revenue while maintaining loyal
customers. Your business creates a strategy based on your target
customer, and you may use more than one strategy to reach more than
one type of target customer.
Need for Marketing Channels
Marketing Channels are sets of interdependent organizations participating in the
process of making a product or service available for use or consumption.
Some intermediaries—such as wholesalers and retailers—buy, take title to, and
resell the merchandise; they are called merchants. Others—brokers,
manufacturers’ representatives, sales agents—search for customers and may
negotiate on the producer’s behalf but do not take title to
the goods; they are called agents. Still others—
transportation companies, independent warehouses, banks,
advertising agencies—assist in the distribution process but
neither take title to goods nor negotiate purchases or sales;
they are called facilitators.
The Role of
Marketing
Channels
Channel Functions and Flows
A marketing channel performs the work of moving goods from producers to consumers. It
overcomes the time, place, and possession gaps that separate goods and services from those who
need or want them. Members of the marketing channel perform a number of key functions.
Channel Levels
A zero-level channel, also called a direct marketing
channel, consists of a manufacturer selling directly to the
final customer. The major examples are door-to-door sales,
home parties, mail order, telemarketing, TV selling, Internet
selling, and manufacturer-owned stores.

A one-level channel contains one selling intermediary, such

as a retailer. A two-level channel contains two
intermediaries. In consumer markets, these are typically a
wholesaler and a retailer. A three-level channel contains
three intermediaries. In the meatpacking industry,
wholesalers sell to jobbers, essentially small-scale
wholesalers, who sell to small retailers.
Channel-Design Decisions
Analyzing Customer Needs and Wants
Establishing Objectives and Constraints
Identifying Major Channel Alternative
Exclusive distribution
Selective distribution
Intensive distribution
Evaluating Major Channel Alternatives
Channel-Management Decisions
Selecting Channel Members
Training and Motivating Channel Members
 Channel Power – It is the ability to alter channel members’ behavior so they take actions
they would not have taken otherwise
 Channel Partnerships - The manufacturer clearly communicates what it wants from its
distributors in the way of market coverage, inventory levels, marketing development,
account solicitation, technical advice and services, and marketing information and may
introduce a compensation plan for adhering to the policies.
Evaluating Channel Members
Modifying Channel Design and Arrangements
Channel Modifications Decisions
Global Channel Considerations
Channel Integration and Systems
Vertical Marketing Systems (VMS) is the type of cooperation between the
members of a distribution channel. It includes a producer, a wholesaler, and a
retailer collaborating to deliver necessary products to their customers and aims at
achieving better efficiency and economies of scale.
Horizontal Marketing Systems in which two or more
unrelated companies put together resources or programs
to exploit an emerging marketing opportunity.

Integrating Multichannel Marketing Systems is one in

which the strategies and tactics of selling through one
channel reflect the strategies and tactics of selling through
one or more other channels.
 RETAILING
It includes all the activities in selling goods or services directly to final consumers
for personal, nonbusiness use. A retailer or retail store is any business enterprise
whose sales volume comes primarily from retailing.
Store Retailers
1. Self-service—Self-service is the cornerstone of all discount operations. Many
customers are willing to carry out their own “locate-compare-select” process to
save money.
2. Self-selection—Customers find their own goods, although they can ask for
assistance.
3. Limited service—These retailers carry more shopping goods and services such
as credit and merchandise-return privileges. Customers need more information
and assistance.
4. Full service—Salespeople are ready to assist in every phase of the “locate-
compare-select” process. Customers who like to be waited on prefer this type of
store. The high staffing cost, along with the higher proportion of specialty goods
and slower-moving items and the many services, result in high-cost retailing.
Nonstore Retailing
1. Direct selling, also called multilevel selling and network marketing, is selling
door-to-door or at home sales parties.
2. Direct marketing has roots in direct-mail and catalog marketing, it includes
telemarketing, television direct-response marketing, and electronic shopping.
3. Automatic vending offers a variety of merchandise, including impulse goods
such as soft drinks, coffee, candy, newspapers, magazines, and other products
such as hosiery, cosmetics, hot food, and paperbacks.
4. Buying service is a storeless retailer serving a specific clientele—usually
employees of large organizations—who are entitled to buy from a list of
retailers that have agreed to give discounts in return for membership
Corporate Retailing and Franchising
Wholesaling is the act of buying large quantities of items from a
manufacturer and reselling them to merchants, who subsequently sell
them to consumers. 
Introduction
to Logistics
Management
Market Logistics
It includes planning the infrastructure to meet demand, then implementing and
controlling the physical flows of materials and final goods from points of origin to
points of use, to meet customer requirements at a profit. Market logistics planning
has four steps:
1. Deciding on the company’s value proposition to its customers.
2. Selecting the best channel design and network strategy for reaching the customers.
3. Developing operational excellence in sales forecasting, warehouse management,
transportation management, and materials management .
4. Implementing the solution with the best information systems, equipment, policies, and
procedures.
Market Logistics
Integrated Logistics Systems include materials management, material flow
systems, and physical distribution, aided by information technology (IT).
Market-Logistics Objectives - “getting the right goods to the right places at the
right time for the least cost.”
Market-Decisions - The firm must make four major decisions about its market
logistics: (1) How should we handle orders (order processing)? (2) Where should
we locate our stock (warehousing)? (3) How much stock should we hold
(inventory)? and (4) How should we ship goods (transportation)?