Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Distribution Planning A process that plans the physical movement and transfer of ownership of goods and services from producers to consumers.

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Economies of a Distribution System Company 1 Company 2 Company 3 Company 4 Distributor Consumer

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Distributor Roles Distributors assist manufacturers in the sorting process. Accumulation Allocation Sorting Assorting Accumulation Allocation Sorting Assorting The objective is to have the right goods (a selection of brands) available in the right sizes, right varieties and right price ranges when the consumer wants them.

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Channels of Distribution Mfg’r Wholesaler Retailer Consumer Mfg’r Retailer Consumer Mfg’r Consumer Indirect Channel Direct Channel

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Channel Decisions Type of Channel Direct or Indirect Type of Channel Direct or Indirect Customer Location Product Competition Company Resources Product Life Cycle

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Channel Length and Width Mfg’r Wholesaler Retailer Consumer Retailer Length Retailer Width

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Multiple Channel Strategies Mfg. Wholesaler Retailer Consumer Mfg. Retailer Consumer Mfg. Sales Force Consumer Mfg. Internet Consumer A firm can reach the same customer in different ways.

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Intensity of Distribution X X X X X X X Intensive Selective Exclusive Many locations Few locations One location

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Channel Conflict The BaySearsWal-MartZellers Horizontal Conflict At the same level of the channel Sony Future ShopSony Store Consumer Vertical Conflict At a different level of the channel

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Channel Control Leadership and control can be at any level of the channel of distribution. Manufacturer Wholesaler Retailer GM, Ford, Microsoft Loblaw Companies Wal-Mart, Canadian Tire Who is really in control?

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Encouraging Channel Cooperation Manufacturer Wholesaler Retailer Good Service Fair Price Policies Promotion Support Sales Training Relationship Marketing The channel captain is responsible for securing cooperation.

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Relationship Marketing in the Channel Electronic online relationships improve efficiency and reduce conflict. Supply Chain Supply Chain Supply Chain Management Supply Chain Management A sequence of companies performing activities related to delivery of goods. Integrating information among supply chain members to improve efficiency.

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Integrated Marketing Systems A company links together channel members at different levels to gain control or improve efficiency.  Vertical Integration  Horizontal Integration

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Vertical Marketing Systems Administered Contractual Corporate Members related through channel leader Contract bound: Cooperatives Voluntary Chains Franchises Related by ownership: Forward Backward

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc A Vertical Marketing System Distribution Centres Atlantic Quebec Ontario Western Distribution Centres Atlantic Quebec Ontario Western Sobey-Owned Retailers IGA Sobeys IGA Extra Price Chopper Bonichoix Foodland Foodtown Knectel Sobey-Owned Retailers IGA Sobeys IGA Extra Price Chopper Bonichoix Foodland Foodtown Knectel Empire Company Empire Company Sobeys Inc. Sobeys Inc. A corporate vertical marketing system

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Horizontal Marketing Systems “Ownership and control at one level of the channel.” Couche-Tard Inc. Couche-Tard Inc. Mac’s Milk Beckers Mike’s Mart Winks Daisy Mart Couche-Tard dominates the convenience store market.

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc New Distribution Strategies  Direct and Electronic Marketing  Multi-Level Marketing (Network)  Contract Marketing

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Logistics Management Order Processing Order Processing Warehousing Inventory Management Inventory Management Planning the physical flow of materials, finished goods and information. Transportation Customer Service Customer Service

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Warehouse Operations Storage Warehouse Storage Warehouse Distribution Centre Distribution Centre Holds goods for long periods to balance supply and demand. Assembles and redistributes goods in shorter periods.

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Inventory Management Securing continuous flow of needed goods so that just the right amount of stock is carried.  Just-in-Time (JIT) Inventory System  Electronic Data Interchange (EDI) Channel members are electronically linked in supply chain management programs.

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc A Seamless Supply Chain Materials and Parts Suppliers Ford Assembly Plant Ford Assembly Plant Ford Web Site Ford Web Site Consumer Marketplace Ford Dealer Ford Dealer Ford Dealer Ford Dealer Ford Dealer Ford Dealer

Canadian Marketing in Action, 6 th ed. Keith J. Tuckwell ©2004 Pearson Education Canada Inc Transportation Coordination The goal is efficiency. Factors such as location of customer, importance of customer, time, and cost influence the decision on mode of transportation. Containerization Piggybacking Freight Forwarder