Distribution

Distribution - 1 Channel of Distribution Related to 2...

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Unformatted text preview: 1 Channel of Distribution Related to Chapter 13, 14 2 Agenda Importance of distribution channels Place Strategy Channel Level Channel Ownership Channel Coverage Supply chain management 3 Why study distribution channels? How can we reach our target customers after we know consumers’ needs and wants Design products and services fitting their needs Set prices We have to provide the PLACE where consumers can get the product and service. 4 Distribution Channels Distribution channel decision is linked with all other decisions Product: supermarket or Internet affects product design Price: consumers’ willing-to-pay is different at different locations (Wal-Mart and Specialty store) . Promotion: where to run the promotions and how to run promotions are related to PLACE (dealers). 5 What is a Distribution Channel? Set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user Manufacturer/ Service Consumers Flow of Products, Information, Payment Distribution Channel 6 The roles of distribution channel To get the products to the target market Reduces producer’s cost Serve end-consumers Marketing activities involves Contact with customers Gathering and distributing marketing information Promoting the product Storage Financing Matching Negotiation 7 Distribution Channel Why manufacturers don’t just distribute products by themselves? Dealers, retailers, wholesalers have Better consumer information More expertise in distributing products Saves cost Using distribution channels can be very efficient to the society 8 A B C D 6 5 4 3 2 1 PRODUCERS CONSUMERS 4 manufacturers x 6 consumers = 24 transactions Number of transactions without intermediaries 9 A B C D 6 5 4 3 2 1 Retailer PRODUCERS CONSUMERS Number of transactions with intermediaries 4 manufacturers + 6 consumers = 10 transactions 10 Marketing channel intermediaries perform three functions, each consisting of different activities 11 Distribution Channel Decision Process Market and consumer analysis Channel Design Channel Level • direct channel • indirect channel Channel Ownership • conventional channel • vertical marketing system Channel Coverage • intensive • selective • exclusive Channel Conflict Management 12 Various factors affecting channel decision Consumer/Demand Characteristics Consumers buy cars: dealers Buy books: bookstores or Internet Homogeneous or heterogeneous consumers? Product characteristics Standard quality? (book, CD) Other factors channel control, services level, financial resources 13 Distribution Channel Decision Process Market and consumer analysis Channel Design Channel Level • direct channel • indirect channel Channel Ownership • conventional channel • vertical marketing system Channel Coverage • intensive • selective • exclusive Channel Conflict Management 14...
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Distribution - 1 Channel of Distribution Related to 2...

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