Distribution’s FunctionDistribution’s Function
The major purpose of marketing is to satisfy human needs by delivering products of various types to buyers when and where they want them and at a reasonable cost.
The “when and where” is the function of Distribution
Channel of DistributionChannel of Distribution
All intermediaries involved in the exchange process
Excludes pre-manufacturing (raw materials or component parts)
Facilitate movement of physical goods and title
PRODUCER
INTERMEDIARIES
CONSUMER
Transporting &storing
Reducingtransactions
Physical Distribution Physical Distribution FunctionsFunctions
Breaking bulk
Accumulating bulkCreating
assortments
Communication & Communication & Transaction FunctionsTransaction Functions
Gather & DisseminateInformation
19
24
13723
57
Buying & Selling
PersonalSelling
AdvertisingSales
Promotion
Transfer of Ownership
Typical Channels of Typical Channels of DistributionDistribution
ANUFACTURER
ONSUMER
HOLESALER
ETAILER
GENT
Business-to-Business Business-to-Business Channel TrendsChannel Trends
Infomediaries & Vertical Exchange
Vertical Marketing Vertical Marketing SystemsSystems
Corporate systems - total ownership
Administered - strong leadership
Contractual - legal relationships
Planning the Channel of Planning the Channel of DistributionDistribution
Determining the structureMarketing mix strategyOrganizational resourcesExternal environmental factorsMarket characteristicsConsumer preferences and behaviorThe nature and availability of IntermediariesOther environmental factors
Intensive DistributionIntensive
Distribution
Seeks to obtain maximum
product exposure at the retail level
Seeks to obtain maximum
product exposure at the retail level
ProducerProducer
RetailerRetailer RetailerRetailerRetailerRetailer
RetailerRetailer
RetailerRetailer RetailerRetailer
RetailerRetailer
RetailerRetailer
RetailerRetailer RetailerRetailer RetailerRetailer
RetailerRetailer
RetailerRetailer RetailerRetailer RetailerRetailer
Selective DistributionSelective Distribution
Product is sold in a Product is sold in a limitedlimited number of number of
outletsoutlets
Product is sold in a Product is sold in a limitedlimited number of number of
outletsoutlets
ProducerProducer
RetailerRetailer RetailerRetailerRetailerRetailer
RetailerRetailer RetailerRetailer RetailerRetailer
Product is sold in Product is sold in only only oneone outlet in outlet in
a given areaa given area
Product is sold in Product is sold in only only oneone outlet in outlet in
a given areaa given area
ProducerProducer
RetailerRetailer
Exclusive Distribution
Other Distribution Other Distribution Management IssuesManagement Issues
Reverse distributionOne Coca Cola
Distributor
One thousand retailers
OK
DifficultEthical, Political, &
Legal