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© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 1
Distribution StrategiesDistribution Strategies
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 2
Distributing ProductsDistributing Products
• Wholesalers
• Retailers
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 3
Customers of RetailersCustomers of Retailers
• Other retailers
• Wholesalers
• Organizations
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 4
Types of Retail OutletsTypes of Retail Outlets
• Physical facilities
• Vending machines
• Virtual stores
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 5
Distribution Function of Distribution Function of Wholesalers and Wholesalers and
RetailersRetailers• Match buyers and sellers
• Provide market information
• Offer promotional and sales support
• Gather an assortment of goods
• Transport and store products
• Assume risks
• Provide financing
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 6
How Intermediaries How Intermediaries Simplify CommerceSimplify Commerce
• Reduce prices
• Reduce contacts
• Create utility
–Time
–Place
–Possession
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 7
Types of WholesalersTypes of Wholesalers
• Merchants
• Agents
• Brokers
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 8
The Changing Role of The Changing Role of
WholesalersWholesalers• The Internet
–Distribution system
–Market reach
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 9
Types of Retail StoresTypes of Retail Stores
• Specialty store
• Category killer
• Discount store
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 10
Nonstore RetailersNonstore Retailers
• Mail-order firmsMail-order firms
• Automatic vendingAutomatic vending
• TelemarketingTelemarketing
• Door-to-door salesDoor-to-door sales
• Electronic cataloguesElectronic catalogues
• CybermallsCybermalls
• Interactive kiosksInteractive kiosks
• E-Commerce websitesE-Commerce websites
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 11
Retail Industry Retail Industry
ChallengesChallenges• Excess store space
• Weakened economy
• Consumer preferences
• Nonstore retailing
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 12
Internet Retail Internet Retail
StrategiesStrategies• Pure-play
• Clicks-and-bricks
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 13
Setting Distribution Setting Distribution
StrategiesStrategies
• Distribution mix
–Kind of product being sold
–Marketing practices of the industry
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 14
Length of Distribution Length of Distribution
ChannelsChannels
• Producer to consumer
• Producer to retailer to consumer
• Producer to wholesaler to retailer to
consumer
• Producer to agent/broker to wholesaler to
retailer to consumer
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 15
Market CoverageMarket Coverage
• Distribution
– Intensive
–Selective
–Exclusive
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 16
Cost FactorsCost Factors
• Selling
• Storage
• Distribution
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 17
Control IssuesControl Issues
• Distribution channels
–Shorter
–Longer
• Overall control
–More
–Less
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 18
Channel ConflictChannel Conflict
• Inadequate product support
• Too many intermediaries
• Multiple sales channels
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 19
Distribution Strategies:Distribution Strategies:
Additional FactorsAdditional Factors• Nature and price of product
• Growth rate of market
• Location of customer base
• Customer’s need for service
• Importance of rapid delivery
• Strengths and weaknesses of intermediaries
• Global laws and customs
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 20
Managing Physical Managing Physical
DistributionDistribution• In-house operations
• Outbound transportation
© Prentice Hall, 2005 Excellence in Business, Revised Edition
Chapter 14 - 21
In-House OperationsIn-House Operations
• Forecasting
• Order processing
• Inventory control
• Warehousing
• Materials handling