Distribution policy Prerequisites: Resource 265 "Targeting your customers" Resource 1549...

Distribution policy

Prerequisites:

Resource 265 "Targeting your customers"

Resource 1549 "Positioning your offer"

Resource 268 "Presentation of the marketing mix"

Objectives in terms of expertise

Act on the distribution variable Know how to choose a circuit Know how to argue in favour of this

choice Know how to calculate sales according

to the choice of circuit

Objectives in terms of content

Defining a distribution channel, The functions of a channel, The criteria for choosing a channel

Laurence Chérel and Catherine Madrid

Objectives in terms of content

A definition of the concept Fixing methods Reactions to changes in price



Links with other NC subjects

DEFINING A DISTRIBUTION CHANNEL


Why talk about distribution?

From the Phoenicians’ trading posts… Making products available to users


From trade to distribution policy

To sell off production Part of the marketing strategy To make products available to users

– in the right place, time and size to suit the user,

– with the required service


Definitions:

CHANNEL: a set of economic agents that intervene between the producer and the final consumer – there are several types of channels

(associated resource) CIRCUIT: a set of channels chosen by

a company to distribute its product


The special features in the case of a service


THE FUNCTIONS OF A DISTRIBUTION CHANNEL


The functions transport the products from the production location to the consumer location,

build up an assortment, – reduce research costs,

provide pre-sale service and all the after-sales services– advise, create a climate

of trust

Product BProduct A Product C


The functions, (cont.)

To enable the manufacturer to create a set of trade relations that are sources of added value for the final consumer

in terms of:– access to the product – service,– its purchase– its use


The value linked to the buying experience

The experience enjoyed by the consumer at the moment of purchase

Sometimes more important than the channel’s trading purpose


A few examples of experiences associated with a channel Buying online: a pragmatic experience Buying in a shop: sharing your interests

with other consumers Buying a farm product from the

producer: reinforces the authentic character of the food product


Other examples of experiences associated with a channel

Distribution may form part of the offer proposed to the consumer

A strategic decision Resource to consult: milk in automatic dispensers


THE CRITERIA FOR CHOOSING A DISTRIBUTION CHANNEL


Short channel

Long channel

WHAT FUNCTION(S) MUST THE PRODUCER DELEGATE?

Delegation of the

functions

Costs of the distributionfunctions


Comparison between short and long channels

Characteristics Advantages Constraints

Short channel

The manufacturer covers all the

distribution functions

Consumer relations

Organizational and logistical

Long channel

The manufacturer delegates all the

distribution functions

Reduction in business costs

Screened off from the market


Choice of channel and revenues

Price and length of the channel

The final price doesn’t necessarily depend on the number of people involved in the channel, but on their ability to optimize the logistics chain– By cutting a middle-man out of the

channel, you’re not eliminating a function


The margin:

N.B. it should not be confused with the sales budget dedicated to point of sale actions, more often known as the distribution budget in the case of a push strategy


The criteria for choosing

Depending on the market Depending on the product

Depending on the company


The market criteria

Buying behaviour, Customer spread, Order frequency.


The product criteria The need for advice at the point of

sale, The phase in the life cycle, The experiential dimension sought

during the purchase, The type of purchase: everyday or

other consumption


TYPES OF PURCHASES AND TYPES OF CHANNELS:

Everyday purchase:

Considered purchase

Speciality purchase

Intensive distribution

Selective distribution

Sole distribution

Resource to consult: The Dukan Group wants toincrease its intensive distribution

The company criteria Financial resources, Prior establishment in the

channel, Negotiating power with the

different people involved in the channel

Resource: the example of Nuxe, the consistency between distribution choices and positioning


A few elements that favour a balance of power in favour of the Supers/Hypers

Development of central buying consortiums Existence of a listing right The appearance of distributor-brand products


The manufacturers’ advantages

– Brand reputation– “Pull” type strategies– The ability to supply volume– Logistics organization


Summary:

Market Product Company

Online sales + + -

Automatic dispenser

+ +- +

Super/Hyper sales

+ + --


Conclusion:

Key point : slide no. 32 Take into account the target

market, the company and the product

Manage the risk of conflicts between the different channels

Be creative…


Bibliography

FILSER Marc, PACHE Gilles, Des GARETS Véronique (2012). - La distribution: organisation et stratégie. -2nd edition. - Cormelles-le-Royal: EMS, Éd. Management et société, 393 pages. - (Les Essentiels de la gestion).

KOTLER Philip, DUBOIS Bernard (2012). - Marketing management. – 14th edition. - Paris: Pearson Education, XL-841 pages. (chap 15. Choisir et animer les canaux de distribution)

COLLIN-LACHAUD Isabelle (2014). - Repenser le commerce: vers une perspective socio-culturelle de la distribution. - Cormelles-le-Royal (Calvados): Management etsociété, 419 pages. -(Societing).

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Distribution policy Prerequisites: Resource 265 "Targeting your customers" Resource 1549...

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