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Definition[ edit ] Distribution is fundamentally concerned with ensuring that products reach target customers in the most direct and cost efficient manner.
In the case of services, distribution is principally concerned with access. The overall approach to distributing products or services depends on a number of factors including the type of product, especially perishability; the market served; the geographic scope of operations and the firm's overall mission and vision.
The process of setting out a broad statement of the aims and objectives of a distribution channel is a strategic level decision. In an intensive distribution approach, the marketer relies on chain stores to reach broad markets in a cost efficient manner. Strategically, there are three approaches to distribution: When products are destined for a mass market, the marketer will seek out intermediaries that appeal to a broad market base.
For example, snack foods and drinks are sold via a wide variety of outlets including supermarkets, convenience storesvending machinescafeterias and others.
The choice of distribution outlet is skewed towards those than can deliver mass markets in a cost efficient manner. A manufacturer may choose to restrict the number of outlets handling a product. For example, a manufacturer of premium electrical goods may choose to deal with department stores and independent outlets that can provide added value service level required to support the product.
Dr Scholl orthopedic sandals, for example, only sell their product through pharmacies because this type of intermediary supports the desired therapeutic positioning of the product.
Some of the prestige brands of cosmetics and skincare, such as Estee Lauder, Jurlique and Clinique, insist that sales staff are trained to use the product range. The manufacturer will only allow trained clinicians to sell their products. In an exclusive distribution approach, a manufacturer chooses to deal with one intermediary or one type of intermediary.
The advantage of an exclusive approach is that the manufacturer retains greater control over the distribution process. In exclusive arrangements, the distributor is expected to work closely with the manufacturer and add value to the product through service level, after sales care or client support services.
The most common type of exclusive arrangement an agreement between a supplier and a retailer granting the retailer exclusive rights within a specific geographic area to carry the supplier's product.
Exclusive distribution The producer selects only very few intermediaries. This strategy is typical of luxury goods retailers such as Gucci. Push vs pull strategy[ edit ] In consumer markets, another key strategic level decision is whether to use a push or pull strategy.
In a push strategy, the marketer uses intensive advertising and incentives aimed at distributors, especially retailers and wholesalers, with the expectation that they will stock the product or brand, and that consumers will purchase it when they see it in stores.
In contrast, in a pull strategy, the marketer promotes the product directly to consumers hoping that they will pressure retailers to stock the product or brand, thereby pulling it through the distribution channel.
In a push strategy the promotional mix would consist of trade advertising and sales calls while the advertising media would normally be weighted towards trade magazines, exhibitions and trade shows while a pull strategy would make more extensive use consumer advertising and sales promotions while the media mix would be weighted towards mass-market media such as newspapers, magazines, television and radio.
Channels are sets of interdependent organizers called intermediaries or distributors involved in making the product available for consumption to end-user. In certain specialist markets, agents or brokers may become involved in distribution channel.
Typical intermediaries involved in distribution include: A merchant intermediary who sells chiefly to retailers, other merchants, or industrial, institutional, and commercial users mainly for resale or business use. Wholesalers typically sell in large quantities. Wholesalers, by definition, do not deal directly with the public.
A merchant intermediary who sells direct to the public. There are many different types of retail outlet - from hypermarts and supermarkets to small, independent stores. An intermediary who is authorised to act for a principal in order to facilitate exchange.
Unlike merchant wholesalers and retailers, agents do not take title to goods, but simply put buyers and sellers together. Agents are typically paid via commissions by the principal. A special type of wholesaler, typically one who operates on a small scale and sells only to retailers or institutions.
For example, rack jobbers are small independent wholesalers who operate from a truck, supplying convenience stores with snack foods and drinks on a regular basis. Channels can be distinguished by the number of intermediaries between producer and consumer. A level one sometimes called one-tier channel has a single intermediary.
A level two alternatively a two-tier channel has two intermediaries, and so on. This flow is typically represented as being manufacturer to retailer to consumer, but may involve other types of intermediaries.
In practice, distribution systems for perishable goods tend to be shorter - direct or single intermediary, because of the need to reduce the time a product spends in transit or in storage.Telespace, Inc.
telecommunications business plan management summary.
TeleSpace, Inc. develops and markets programmable personal communications and unified messaging services for individuals and businesses. The company now has four executives and will be hiring a Sales Channel Manager /5(19). A channel strategy is a vendor's plan for moving a product or a service through the chain of commerce to the end customer.
The purpose of a channel strategy. In the business-to-business (IT manager vs. C-level executive, for example), outlines the product's value proposition and sets forth the channel .
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We have slips to . 6 Market research - group studies available to selected clients at $5, per unit. A group study is packaged and published, a complete study of a specific market, channel, or topic. 60 Minute Crash Course on Channel Management 1. 60 Minute Crash Course on Channel Management Designing and Managing an Effective Software Reseller Network presented by: Casey S.
Potenzone Ken Beam VP, US Sales President Avangate The VAR-City business plan Program Level Descriptions Easy Product Order/Quoting, Tiering and Segmentation. By Owen Haacke. China’s policymakers are starting to reveal details about the direction of the country’s next Five-Year Plan (FYP), the central government blueprint for .