GROUP MEMBERS:

IRSHAD MADAHAT ZAINAB

WAJEEHA

The distribution plan focuses on the set of decisions relating to the processes which are concerned with the flow of supplies, components & services between sources of supply, the producer, intermediaries and end user.

ORDER FILLING

CHANNELS OF DISTRIBUTION

PHYSICAL DISTRIBUTION

 It

is a combination of supply chain layers through which a seller markets products to the user or ultimate consumers. It provides the essential links that connect producers and customers.

It is the member of marketing 4 ps.

In every industry you may have a precise channel vocabulary: Place Channel Marketing channel Distribution Channel of distribution

More Or Less Mean The Same Thing.

DIRECT CHANNEL: When a producer and ultimate consumer deal directly with each other. It consist Door to door sale , mail orders, telemarketing ,Internet selling, manufactured owned stores etc.

Example: Dell Amazon sells book online directly to customers. Gateway also sell it laptops through its own stores.

 INDIRECT

CHANNEL: When there are intermediaries between the producers & consumers.

EXAMPLE :Procter & gamble

Primary channels are mass merchandisers, grocery stores, membership club stores, and drug stores.

THE PIPELINE OF THE PRODUCT & SERVICES FROM PRODUCERS TO CUSTOMERS

Channel management holds the analysis,

planning, organizing and controlling of an enterprises channel of distribution

 AN

INCREASING EMPHASIS ON THE DEVELOPMENT OF CHANNEL STRATEGY:

Recently it is recognized that channel strategy can be important mean of achieving competitive advantage.

 THE

EMERGENCE OF NEW RETAILING CONCEPTS:

Many new retailing concepts are emerging i.e. many retail outlets are selling products through catalogue. Catalogue : A book published by a manufacturer, containing the numbers of their products.

 THE

INCREASING IMPORTANCE OF CHANNEL POWER:

Channel driven strategies are being used by an increasing number of companies which seek to develop or acquire products which can be marketed through same channels.

EXAMPLE :
Gillette acquire oral-B laboratories i.e. razors and razors blades are sold through the same channel as toothbrush & other dental hygiene products.

 GROWTH

OF PARTNERSHIP & STRATEGIC ALLIANCE: Now a days we sees establishment of close relationship between producers and key intermediaries for generating competitive advantage.

 THE

DEVELOPMENT OF DIRECT MARKETING:

In recent years the emergence of data base marketing has resulted in the huge use of direct mail & telephone as a distribution channel.

EXAMPLE: A significant proportion of insurance business is now conducted through telephone.

 ENHANCED

DISTRIBUTION PRODUCTIVITY:

Considerable increase in the use of information technology within distribution have resulted in both cost reduction and better management in distribution channels.

Formulating channel strategy

Design channel structure

Select channel members

Motivate channel members

Coordinate with marketing mix Given By: Rosen bloom In 1995

Evaluate member performance

Objective of distribution strategy is how, when & where the market offering should be made available to the targeted markets. Distribution strategy provides means to these ends. Distribution strategies can provide sustainable competitive advantage.

 While

formulating a channel strategy it is necessary to consider the characteristics of order. Large order may require different distribution strategies from those which are appropriate for small orders. & carry are more appropriate for small orders Whereas direct delivery from producer to final consumer is more appropriate for large orders.

Cash

Target markets or customers demand strong emphasis on distribution. Competitive parity exist in other marketing mix variables , with the need for channel strategy to provide some differential advantage. Competitive weakness exists because of distribution neglect. Opportunities of synergy exist through channel strategy.

Doyle suggested three channel options:

1. 2. 3.

Direct marketing Sales force Intermediaries

DIRECT MARKETING :
A marketing channel that has no intermediary levels.

EXAMPLE: Tupperware representative sell kitchen equipment through home parties.

When To Used Direct Marketing?

Direct

distribution is used when an organization can effect distribution better than intermediaries at an equivalent or lower cost. Sufficient resources are available
Benefits of direct marketing: Low cost

All profit is of producer

BARRIERS TO DIRECT MARKETING :

It

is in the form of entrenched buying behavior i.e. that peoples get used to buying through particular intermediaries and have an in-built inertia to change. reach is not possible through direct marketing. directly.

Desired

Producer

lack financial resources to market

DIRECT MARKETING METHODS

Advertising Telephone Mail

Door

to door

Newspaper

 Persons

responsible for selling products or services via direct contact with the customer. OR The division of a business that is responsible for selling products or services.

It can be : Own Sales force Another Firms

Definition Channel containing one or more intermediary levels Indirect marketing methods:

Indirect marketing is done by intermediaries which are : Merchants Agents Facilitators

BENEFITS OF INDIRECT MARKETING

By the use of indirect marketing number of transactions has been reduced as in figure now customer has to deal only with one supplier instead of two

Producer 2

Producer 1

Producer 2

Producer 1

Producer 2

Vs.

1 2 3 4 5

7 8

10

10

 In

deciding the most appropriate configuration of distribution channels it must be decided whether to aim to sell products through all available outlets, through a selection of the available outlets in a particular area, or to limit distribution to one outlet in each area.

There are three types of distribution strategies

Exclusive

XXXXXX XXXXXX XXXXXX inclusive XXXXXX XXXXXX XXXXXX XXXXX X

inclusive Distribution

X
X X X

Exclusive Distribution

Selective Distribution

EXCLUSIVE DISTRIBUTION

Limiting the distribution to typically only one per geographical area it has products that are expensive, Rolex infrequently purchased

Examples: Rolex Car show rooms

Faberge

 INTENSIVE

DISTRIBUTION

Distribute from as many outlets as possible to provide location convenience it includes Selective distribution

Examples :Basic Foods, Cigarettes, Toothbrushes, Toothpaste, Soap, Detergent & so forth

SELECTIVE DISTRIBUTION
Appoint several but not all retailers is selective distribution Examples: Levis Sony
Levis Sony

 Customers

needs or expects specialist advice, facilities

sales volume would not warent more intensive distribution wishes more control over channel members distribution result in conflict between channel members

Potential

Manufacture

Intensive

 After

deciding best channel design for implementation company select members on the bases of growth record, cooperativeness & reputation.

ECONOMIC CRITERIA:

It reflect the pattern & level of costs, sales revenue & profits the best alternative is one which shows best relation between cost & sales which in turn increases profits.

CONTROL CRITERIA: Select channel members which can be control easily i.e. less easily i.e. less conflict arise between them

ADAPTIVE CRITERIA:

Select members who have flexibility in responding to change conditions.

END USER CONSIDERATION: select channel members favored by customers otherwise it is not helpful to distribute your product successfully.

PRODUCT CHARACTERISTICS: While selecting members keep in mind & select members who are competent to handle complexity, special applications requirements

MANUFACTURE CAPABILITY & RESOURCES:

select channel members in which Manufacture

capability & resources is reflected in bargaining power & channel control.