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Unit 7: Distribution

Unit 7: Distribution. Mrs. Brink Marketing Principles. What is distribution?. What do you think distribution is all about?. Reading Activity. http://www.saylor.org/site/wp-content/uploads/2013/02/BUS203-PoM-Ch8.pdf Pages 1-9 STOP AFTER BROKERS SECTION

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Unit 7: Distribution

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  1. Unit 7: Distribution Mrs. Brink Marketing Principles

  2. What is distribution? • What do you think distribution is all about?

  3. Reading Activity • http://www.saylor.org/site/wp-content/uploads/2013/02/BUS203-PoM-Ch8.pdf • Pages 1-9 STOP AFTER BROKERS SECTION • 1. Why are marketing channel decisions as important as pricing and product feature decisions? • 2. Why do channel partners rely on each other to sell their products and services? • 3. How do companies add value to products via their marketing channels? • When you are done…. • Twitter Vocabulary Activity Chapter 13

  4. The 4 P’s • Product • Price • Place • Promotion The Seven Functions • Product Service Management • Market Information Management • Financing • Distribution • Pricing • Promotions • Selling

  5. The Importance of Distribution Activities • Distribution as an economic concept • Important for free enterprise • Influences supply and demand • PLACE UTILITY • Distribution is also an element of our Marketing Mix which is implemented throughout all marketing decisions!

  6. What is a Channel of Distribution? • The path a product takes from the producer to the final user. • All products have a channel!

  7. Channels of Distribution • Producer • Wholesaler • Agent • Retailer • Consumer/Industrial User Channel Members: help to move products through the path

  8. The Need for Distribution Channels • Adjusting differences between producers and consumers • Differences in quantity: must be able to adjust for large and small quantities • Differences in assortment: must get products from a number of sources • Differences in location: must get products to convenient locations • Differences in timing of production and consumption: different times of year require different distribution

  9. Industrial Users • Market consisting of all customers who make purchases for business purposes; also called the business-to-business market

  10. Consumers • Those who buy and actually use the product.

  11. Intermediaries • Intermediaries are channel members that help move products from the producer or manufacturer to the final user. • “Middlemen”

  12. Types of Intermediaries • Merchant Intermediaries • Wholesalers • Retailers • Agent Intermediaries • Independent Manufacturer’s Agents • Brokers

  13. Planning and Managing Channels of Distribution • Channel participants • Channel members • Direct channel • Indirect channel Chapter 13

  14. Distribution StrategiesDirect vs. Indirect Distribution • Direct - Goods or services are sold from the producer directly to the final user – no intermediaries are involved. • Indirect - Goods or services are sold through the use of intermediaries.

  15. Distribution Intensity • Intensive • Complete market coverage • All suitable outlets • Selective • Limited number of outlets • More control • Exclusive • Protected Territories • Franchises

  16. 5 Channels for Consumer Products • 1 : Direct sales from manufacturer to consumer – Avon • 2: Manufacturer to Retailer to Consumer • 3: Manufacturer to Wholesaler to Retailer to Consumer • 4: Manufacturer to Agent to Wholesaler to Retailer to Consumer – Small retailers, “Mom and Pop” type stores • 5: Manufacturer to Agent to Retailer to Consumer – Cookware, Meat, Cosmetics, Supermarkets

  17. Multiple Channels of Distribution Sometimes businesses opt to use a mixture of distribution channels Direct + Indirect=Multiple Channels Chapter 13

  18. Wholesalers & Retailers • Wholesalers • Buy large quantities of goods from manufacturers, store the goods, and resell them to other businesses. • Retailers • Sell goods to the ultimate consumer through their own stores.

  19. Who Needs Wholesaling? • Benefits of wholesaling • Specialize in storage • Cheaper • Purchases in efficient quantities • Wholesaling activities • Buying, selling, transporting, storing and financing • Wholesale clubs—SAM’S Club

  20. Types of Retailers Product mix • Limited-line retailers • Mixed merchandise retailers • Superstores • Service retailers Location • Brick and Mortar • Convenience stores • Shopping centers • Stand-alone stores • Non-store retailing • Online

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