07-05-2014, 03:27 PM
Distribution Management & The Marketing Mix
Distribution Management.ppt (Size: 706 KB / Downloads: 20)
Learning Objectives
Role of distribution management in the marketing mix
Why distribution channels are required
Distribution channel strategy
Overview of distribution channel members
Intensity in the distribution effort
Example
Consumer wants to buy a tube of toothpaste
Made available at a retail outlet close to her residence – place
Made available at 8 pm on a Tuesday evening when she wants it – time
She can pay for the toothpaste and take it away – possession
The company distribution function has made all this possible.
The situation would be similar if a customer wants to buy a refrigerator or medicines or even an electric motor
Players Involved
The company and its distribution network
Direct company to consumer
Company to a C&FA / distribution center to distributors to retailers
Distributor to wholesaler to retailer
All these intermediaries help the process of ‘exchange’ of the product or service.
Distribution Management
Management of all activities which facilitate movement and co-ordination of supply and demand in the creation of time and place utility in goods
The art and science of determining requirements, acquiring them, distributing them and finally maintaining them in an operationally ready condition for their entire life.
Listing of Channel Members
Company own sales team
C&FAs and CSAs
Distributors, dealers, stockists, value-added re-sellers
Agents and brokers
Franchisees
Electronic channels
Wholesalers
Retailers
Wholesalers
Operate out of the main markets
Deal with a number of company products of their choice
Are not on contract with any company
Sell to other wholesalers, retailers and institutions
Negotiate about 15 days credit from company distributors – also provide credit to their customers
Operate on high volumes and low margins
Policy & Procedure
Define policy and implementation guidelines through Operating Manuals
Policy guidelines include
Code of conduct for channel members
System for redressal of complaints
Any additional subsidies etc
Handling institutional business
Service policy for engineering products
Key Learnings
Companies could also choose the intensity of distribution based on their products and distribution objectives
Distribution could be intensive, selective or exclusive
The distribution strategy takes care of service levels, objectives, activities, organisation to deliver the service, measurement of performance and critical success factors