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DISTRIBUTION POLICY - PowerPoint PPT Presentation


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DISTRIBUTION POLICY. D. Distribution policy. Includes two sets of activities: (1) logistics (2) selection and management of channels of distribution. Policy involves two main decisions:. Those related to design Direct or Indirect Those related to management.

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Presentation Transcript
distribution policy1
Distribution policy
  • Includes two sets of activities:
  • (1) logistics
  • (2) selection and management of channels of distribution
policy involves two main decisions
Policy involves two main decisions:
  • Those related to design
    • Direct or Indirect
  • Those related to management
two types of middlemen in direct channels
Two Types of Middlemenin direct channels
  • Merchant middlemen take title to products and may or may not take possession
  • Brokers may or may not take possession, but never take title
slide5

decisions related to design--basically related to length (number of different types of middlemen) and breath (number within each type of middleman)

  • Marketer > wholesaler> retailer> consumer
  • “ > “ > “
  • “ > “
  • etc.
management refers to on going efforts to develop manage and control the designed selected channel
Management refers to on-going efforts to develop, manage, and control the designed/selected channel
distribution strategy
Distribution Strategy
  • SHOULD ACCOMPLISH THE

FOLLOWING OBJECTIVES:

slide8

1. Provide the best coverage of target market(s)--deliver product at right place, in right quantity, at right price, and at a time when buyers wish to purchase

  • 2. Satisfy buyer requirements--needs for information, convenience of purchase, services (delivery, credit, repair, etc.)
slide9

3. Maximize potential revenues returned to the organization while minimizing the costs of achieving 1 and 2

distribution policy development

DISTRIBUTION POLICY DEVELOPMENT

NEED TO CONSIDER FUNCTIONS PERFORMED BY CHANNEL MEMBERS

Required Functions are related to push and pull

channel functions
Channel Functions
  • What tasks have to be performed
    • Physical possession Fulfill demand
    • Ownership After sale service
    • Information Provide feedback
    • Orders
    • Payment
    • Generate demand
slide12

How much does it cost to perform the tasks

  • What channel structure can most efficiently perform the tasks
  • YOU CAN DO AWAY WITH THE DISTRIBUTOR BUT NOT ITS FUNCTIONS
channel selection
CHANNEL SELECTION
  • What different channels exist/are available
  • Which can best deliver our products to different segments of our end users
  • Which channels do our competitors use
  • How intensive should our distribution be
    • Exclusive (specialty products)
    • Selective (shopping products)
    • Intensive (convenience products)