Distribution Place Considerations in Distribution.

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Presentation transcript:

Distribution Place Considerations in Distribution

Review What are channels of distribution?What are channels of distribution? What are intermediaries?What are intermediaries? What are two types of intermediaries?What are two types of intermediaries? Name two agent intermediaries?Name two agent intermediaries?

Considerations in Distribution Planning

Objectives Identify and discuss levels of intensity of distributionIdentify and discuss levels of intensity of distribution Identify advantages and companies sales force vs. agents.Identify advantages and companies sales force vs. agents.

Key questions manufacturers or producers must make concerning distribution How widely can we distribute our products?How widely can we distribute our products? –What outlets will be used? How will we sell our products to these outlets?How will we sell our products to these outlets? –Will we use a sales force or intermediaries? How much control will we want over our products in store?How much control will we want over our products in store? How much are we willing to spend on getting our products to market?How much are we willing to spend on getting our products to market?

How widely can we distribute our products? Distribution intensity: How widely a product will be distributed. Levels of distribution intensity: Intensive Distribution Intensive Distribution Selective Distribution Selective Distribution Exclusive Distribution Exclusive Distribution Integrated Distribution Integrated Distribution

Intensive Distribution Use all suitable outlets (complete market coverage)Use all suitable outlets (complete market coverage) Sell to as many customers as possibleSell to as many customers as possible –Wherever they shop Products include: Convenience or everyday goods Frequently purchased goods

Selective Distribution Use of limited outlets within a given geographic areaUse of limited outlets within a given geographic area Select retailers that maintain the image of the product and are willing to promote itSelect retailers that maintain the image of the product and are willing to promote it Examples include: Malls, Department Stores, Specialty StoresExamples include: Malls, Department Stores, Specialty Stores Products include: ClothingAppliancesFurniture

Exclusive Distribution Use of only one dealer within a geographic areaUse of only one dealer within a geographic area –Dealer is usually granted exclusivity rights and only carries that one brand of a particular product Retailer and producer retain prestige, image, channel control, and high profit marginRetailer and producer retain prestige, image, channel control, and high profit margin Products include: Franchises Car Dealers NAPA Auto Parts Dealers

Integrated Distribution Manufacturer owns and runs the retail storeManufacturer owns and runs the retail store Offers complete control of the products and consumer shopping experienceOffers complete control of the products and consumer shopping experience Includes outlet storesIncludes outlet stores

Key questions manufacturers or producers must make concerning distribution How widely can we distribute our products?How widely can we distribute our products? –What outlets will be used? How will we sell our products to these outlets?How will we sell our products to these outlets? –Will we use a sales force or intermediaries? How much control will we want over our products in store?How much control will we want over our products in store? How much are we willing to spend on getting our products to market?How much are we willing to spend on getting our products to market?

Company/Direct Sales Force Advantages More controlMore control –Set sales quotas –Maintain inventories –Execute sales promotions Act as ambassadorsAct as ambassadors Disadvantages Costs more to maintain –Salaries –Benefits

Outside Agents/Brokers Advantages Not on payrollNot on payroll Handle simple in-store executionHandle simple in-store execution Established a relation ship with retailerEstablished a relation ship with retailer Disadvantages Not on your payroll Less control –Little control of scheduling –Limited execution Not an ambassador for your products

Review What is distribution intensity?What is distribution intensity? What is the difference between exclusive distribution and selective distribution?What is the difference between exclusive distribution and selective distribution? What are some of the advantages of having an in house sales dept?What are some of the advantages of having an in house sales dept? What are some of the advantages of using brokers?What are some of the advantages of using brokers?